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It has much stronger institutions and – most important of all – a floating exchange rate.
Today India has a floating exchange rate and a government with almost no foreign-currency debt.
A floating exchange rate may even, in the short term, make some of them worse.
A floating exchange rate acts as a kind of shock absorber, in theory.
The United States has independent monetary policy and a floating exchange rate.
If a country has a floating exchange rate, it must choose a policy to go with the floating rate.
It is more flexible (with a floating exchange rate) and its central bank is still soundly run.
A floating exchange rate, while no panacea, might have provided the early alarms and policy flexibility that Argentina lacked.
It has built up substantial foreign-exchange reserves and has a floating exchange rate, which allows it to adjust to a fall.
On currency, he said Australia experimented with almost every type of exchange rate structure before finally adopting a floating exchange rate and an open capital account.
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Without that convertibility, much deeper domestic financial markets and a floating exchange-rate, the yuan will not achieve the third essential becoming a global reserve currency, such as the dollar, euro, yen, sterling or Swiss franc.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com