Evolution of Exchange Rate Behavior in the ASEAN-5 Countries

Vladimir Klyuev and To-Nhu Dao

No 2016/165, IMF Working Papers from International Monetary Fund

Abstract: This paper examines exchange rate behavior in the ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand). It finds that for the last 10 years there is no evidence that their central banks target particular exchange rate levels against any currency or basket. Thus, contrary to some assertions, they do not belong to a U.S. dollar club, a Japanese yen club, a Chinese renminbi club, or an ASEAN club. At the same time, they clearly try to smooth short-term volatility, particularly vis-à-vis the U.S. dollar. The degree of smoothing declined noticeably after the Asian Financial Crisis and less obviously after the Global Financial Crisis, with heterogeneity across countries. Short-term smoothing without level targeting does not interfere with monetary policies aimed at price stability.

Keywords: WP; U.S. dollar; malaysian ringgit; Exchange rate regimes; exchange rate volatility; fear of floating; currency blocks; ASEAN; U.S. dollar peg; British pound; currency movement; Chinese renminbi; reference currency; Currencies; Exchange rates; Exchange rate analysis; Exchange rate adjustments; Exchange rate policy; Global (search for similar items in EconPapers)
Pages: 34
Date: 2016-08-08
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Citations: View citations in EconPapers (9)

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