Malta fixed its currency for two decades to a basket, with little use of monetary policy, then moved via a period of exchange rate targeting, first to the basket and then to the euro within ERM2, together with some monetary and financial modernisation, to membership of EMU from 2008.

Years Targets and attainment Classification
1974-94 currency fixed to basket, initially more for inflation control but later partly for competitiveness; repeated changes to basket (which becomes simpler, more transparent and more stable over time); devaluation 1992; monetary policy assigned to development, interest rates rarely changed; no autonomous foreign exchange market, little use of domestic monetary policy instruments; capital controls augmented exchange rate fix AERF
1995-2007 1995-2004 exchange rate pegged to basket; some monetary and financial modernisation by now, including more or less active interbank money and foreign exchange markets and limited capital account liberalisation; currency into ERM2 in May 2005 (Malta joined EU in May 2004) within very narrow margins, capital controls eliminated, some more use of indirect monetary policy instruments full exchange rate targeting FERT
2008-14 membership of European Monetary Union currency union CU

Selected IMF references: RED 1979 pp42-3, 59-60; SR 1986 pp4, 7; RED 1988 pp43-4, 87; RED 1994 pp29-33, 36-40; RED 1997 pp33-6, 41; SR 2007 p18.

Additional sources: Grech (2003); IMF (2004), chV, especially pp36, 40-41, 42-3.

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