In recent days, Iceland has taken over the country's second-biggest bank, fixed the exchange rate of its plummeting currency, and asked Russia for a euro4 billion loan as it scrambled to stop the collapse of its economy.
Bank Indonesia is more pragmatic than the Bank of Thailand, widening the rupiah's exchange rate trading band to 8% and ensuring more flexibility in monetary policy.
If a central bank buys foreign currency to hold down the exchange rate of the domestic currency, it creates more domestic money.
In the run-up to entry, the Bank of England would have to target the exchange rate against the euro, rather than inflation.
Mr Bhalla also takes issue with a suggestion that the Reserve Bank adopt an exchange-rate target a band of plus or minus 5% around a currency-weighted rate.
The governor of the central bank enthuses about unifying the exchange rate, but declines to say what the country's foreign reserves are.
When Mervyn King recently said that the fall in the exchange rate was helpful the governor of the Bank of England was merely stating an obvious truth.
South Korea's inflation has relatively contained in recent months, leaving the central bank with scope to cut rates to restore a modicum of exchange-rate stability.
Under a currency board arrangement, the central bank guarantees the redemption of all notes in circulation at a set exchange rate to the dollar or another foreign currency or basket of currencies.
The weaker the reputation of the central bank, the stronger the case for pegging the exchange rate to build confidence that inflation will be controlled.
It seems the Ministry of Finance has ceded foreign exchange rate policy back to the Central Bank where it belongs. the bank has, for now, won the policy argument that further weakening of the real will be inflationary and lead to a stronger real exchange rate, says Tony Volpon, managing director at Nomura Securities in New York.
Asked about the trend for central banks to look less at inflation-targeting and more at policy areas that affect exchange rates, Mario Draghi, president of the European Central Bank, said earlier this month that the exchange rate was very important "as far as growth and stability" were concerned but was not a policy target for the ECB.
Foreign investors report presentations by the Central Bank mentioning a real (ie, inflation-adjusted) exchange rate that implies annual inflation of around 20%.
They have surrendered control of the currency to an independent central bank that targets inflation, not the exchange rate.
Mundell is proposing, in effect, a de facto super-regional currency area by managing the exchange rate between the dollar and the euro through a process of central bank coordination.
FORBES: Mundell's Dollar/Euro Fix Doesn't Fix Our Currency Mess
The central bank is supposed to be independent, and is also supposed to be in charge of exchange-rate and monetary policy.
With hyperinflation, a gap of around 10:1 has opened up between the official exchange rate operated by the bank and the true rate reflected in the black market.
If, as a result of capital inflows, there is an excess supply of foreign currency, the central bank must buy it and sell yuan to keep the exchange rate stable.
The trade surplus leads to large inflows of foreign currency, which is bought up by the central bank in order to hold down the exchange rate.
And in some cases a bank decides on its own to hold on to a transfer in the hope of getting a better foreign-exchange rate for the customer the following day, or in order to batch it with other transfers and so lower its costs.
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