The evolving renminbi regime and implications for Asian currency stability

Guonan Ma and Robert McCauley

No 321, BIS Working Papers from Bank for International Settlements

Abstract: 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 two 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 2006-08 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.

Keywords: exchange rate regime; renminbi; effective exchange rate; regional currency stability; regional monetary cooperation (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-09
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mon and nep-sea
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Citations: View citations in EconPapers (21)

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Journal Article: The evolving renminbi regime and implications for Asian currency stability (2011)
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