ABSTRACT
The outline of the rem ainder of this chapter is as follows. In Section 13.1 the theoretical requirements for the operation of a dual exchange system are considered, and the difficulty in separating current and capital account transactions noted. The advantages of a dual system over, say, capital controls are discussed in Section 13.2. Various countries’ experiences with dual rates are briefly considered in Section 13.3, and in Section 13.4 the insulation properties of a dual system are discussed.
