A country with a currency board does not have control over its local interest rates.

Question

Quizplus · Accepted Answer

With a currency board, the central bank is required to maintain a fixed exchange rate between its currency and a reserve currency (usually the US dollar or euro). This means that in order to maintain the fixed exchange rate, the currency board must adjust its domestic interest rates to match those of the reserve currency country. Therefore, a country with a currency board does not have control over its local interest rates.

A Country with a Currency Board Does Not Have Control