This week I published, through Common Weal, a discussion paper on the potential currency options for an independent Scotland in light of the material changes in circumstances caused by the Brexit vote.
This paper examines some of the options open to an independent Scotland and concludes that, on balance, the best option for Scotland would be a Scottish currency, initially pegged to Sterling but with the infrastructure and mechanisms in place to move, replace or remove that peg if and when it proves advantageous.
(As the UK did itself in the 1980’s when the pound was pegged first to the US dollar and then to the Deutschmark.)
One of the requirements of an independent currency is that Scotland would need its own foreign reserve fund which would act as a buffer against trade imbalances and would be used to counter movements in exchange rate (particularly if we were pegged our exchange rate to Sterling).
It was on this particular point that yesterday’s Scottish edition of the Daily Express chose to focus, in its characteristically measured, balanced and thoughtful manner.