currency, monetary-policyAre there any existing currencies where the monetary base is either fixed or increased/decreased based on strict rules (as opposed to being modified by a central bank based on what’s believed to by good for the economy)?
Please note that I am talking about the official currency of a country/region, not small scale projects or experiments.
Edit: I’m not just looking for a case where the size of the monetary base is not controlled by the local government. I understand that “based on strict rules” above fits the case of a pegged currency but I was thinking more along the lines of “increased by 1% every year” than “adjusted to maintain a certain exchange rate”.
Technically any pegged currency is fixed by the foreign reserves of the central bank.
This was a big deal during the Asian financial crisis when the reserves were dwarfed by fleeing capital.
Of course Central banks can still affect the peg by changing their reserves, but this is true also with commodity money (central banks could buy or sell gold/silver/whatever)
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