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China’s Evolving Exchange Rate Regime

Sonali Das

No 2019/050, IMF Working Papers from International Monetary Fund

Abstract: China’s exchange rate regime has undergone gradual reform since the move away from a fixed exchange rate in 2005. The renminbi has become more flexible over time but is still carefully managed, and depth and liquidity in the onshore FX market is relatively low compared to other countries with de jure floating currencies. Allowing a greater role for market forces within the existing regime, and greater two-way flexibility of the exchange rate, are important steps to build on the progress already made. This should be complemented by further steps to develop the FX market, improve FX risk management, and modernize the monetary policy framework.

Keywords: WP; RMB; exchange rate; dollar; market; People's Bank of China; reminbi; foreign exchange market; liquidity; USD rate; foreign exchange; formation mechanism; FX market; parity rate; USD depreciation; RMB exchange rate indices; Exchange rates; Exchange rate flexibility; Exchange rate arrangements; Currencies; Global (search for similar items in EconPapers)
Pages: 31
Date: 2019-03-07
New Economics Papers: this item is included in nep-mon and nep-rmg
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Citations: View citations in EconPapers (10)

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Handle: RePEc:imf:imfwpa:2019/050