The currency board option is itself highly dubious in our opinion, except in extraordinary
cases. Most countries, especially export-oriented commodity-based economies, require the
flexibility of exchange rates to adapt to foreign shocks, such as a sharp decline in export prices. Moreover, countries with currency boards remain vulnerable to self-fulfilling creditor panics, and sometimes even more vulnerable than pegged rate countries, since the central bank can no longer
be a lender of last resort to the domestic banking system in the event of a creditor run.