The Evolution and Impact of Asian Exchange Rate Regimes
This paper revisits the issue of evolution and choice of exchange rate regimes in Asia. It argues that the Asian exchange rate policy is better viewed as "fear of appreciation" rather than "fear of floating" per se.
This paper revisits the issue of the evolution and choice of exchange rate regimes in Asia. The paper first compiles and discusses the de jure or official exchange rate regimes in various developing and emerging Asian economies. It then goes on to offer a simple empirical estimation of the degree of influence of the G3 currencies (US dollar, euro, and Japanese yen) in selected Asian currencies over the past decade. The paper finds some evidence of evolution of Asian exchange rate policies toward an apparent "fear of appreciation" rather than "fear of floating" per se. The broader point though is a general reluctance of many Asian economies to allow for a benign neglect of their currencies both in terms of managing volatility as well as in terms of leaning against the wind. The paper examines some of the concerns with exchange rate flexibility that persist, and offers an extended discussion on the appropriate exchange rate regimes for Asia in the future.
- Exchange Rate Regimes in Developing and Emerging Asia
- Degree of Influence of G3 Currencies on Asian Exchange Rates
- Asymmetry in Asian Exchange Rate Policies
- Some Concerns with Exchange Rate Flexibility
- Exchange Rate Implications for Asia
- Going Forward: Beyond the Financial Crisis