The fall of tightly managed exchange rate regimes in East Asia, Russia, Brazil, Turkey and Argentina resulted in a massive decline in living standards in these countries. These crises also brought the issue of optimal exchange rate regimes to the core of the international policy agenda.
While there are no simple recipe for the optimal choice of a currency regime in any country, one can safely emphasise the importance of consistency within the exchange regime and its underlying macroeconomic policies and economic fundamentals. It is easy to agree with those who have pointed out that no regime can ultimately substitute for sound macroeconomic policies.