The evolving renminbi regime and implications for Asian currency stability

Guonan Ma and Robert McCauley

Journal of the Japanese and International Economies, 2011, vol. 25, issue 1, 23-38

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 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.

Keywords: Exchange; rate; regime; Renminbi; Effective; exchange; rate; Regional; currency; stability; Regional; monetary; cooperation; Asian; currencies; Currency; basket; US; dollar; Euro; Yen; SDR (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (48)

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Working Paper: The evolving renminbi regime and implications for Asian currency stability (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:25:y:2011:i:1:p:23-38

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