The evolving renminbi regime and implications for Asian currency stability
The Chinese authorities described the management of the renminbi after its 2005 unpegging from the US dollar as involving a basket of trading partner currencies. Outside analysts have detected few signs of such management. We find that, in the 2Â years from mid-2006 to mid-2008, the renminbi strengthened gradually against trading partners' currencies within a narrow band. In mid-2008, the financial crisis interrupted this experiment and the bilateral renminbi/dollar exchange rate stabilised at 6.8. The 2006-2008 experience suggests that a shared policy of gradual nominal effective appreciation renders East Asian currencies quite stable against one another. Such a shared policy would create favourable conditions for regional monetary cooperation.
Year of publication: |
2011
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Authors: | Ma, Guonan ; McCauley, Robert N. |
Published in: |
Journal of the Japanese and International Economies. - Elsevier, ISSN 0889-1583. - Vol. 25.2011, 1, p. 23-38
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Publisher: |
Elsevier |
Keywords: | Exchange rate regime Renminbi Effective exchange rate Regional currency stability Regional monetary cooperation Asian currencies Currency basket US dollar Euro Yen SDR |
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