The Asian Currency Unit Deviation Indicators And Exchange Rate Coordination In East Asia
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Author | : Victor Pontines |
Publisher | : |
Total Pages | : 27 |
Release | : 2015 |
Genre | : |
ISBN | : |
Employing the panel convergence method of Phillips and Sul (2007) to the nominal deviation indicators of two recent unofficial constructions of the Asian Currency Unit (ACU) index, this paper examines the existence and extent of convergence in the movements of East Asian currencies against the ACU. Empirical results reveal that intra-East Asian exchange rate movements have not converged to form a cohesive, unified bloc where currencies share homogenous movements, regardless of whether one examines the data on intra-East Asian exchange rate movements before or after the collapse of Lehman Brothers in September 2008. Instead, a separate number of convergent clubs or blocs in the region have formed in recent years. Finally, and most importantly, economies in the region are, generally, converging at different speeds to two opposing poles of convergence: groups of relatively depreciating currencies, and groups of relatively appreciating currencies.
Author | : Ramkishen S. Rajan |
Publisher | : World Scientific |
Total Pages | : 325 |
Release | : 2009 |
Genre | : Business & Economics |
ISBN | : 9812834583 |
A decade has passed since the Asian crisis of 1997OCo1998 which decimated many of the regional economies. While the crisis itself led to severe economic and political consequences, its primary cause was an inappropriate mix of policies, as regional economies attempted to simultaneously maintain fairly rigid exchange rates (soft US dollar pegs) and monetary policy autonomy in the presence of large-scale capital outflows. The chapters in this volume focus on selected exchange rate, monetary and financial issues and policies that are of contemporary relevance and importance to Asia, including choice of exchange rate regimes, causes and consequences of reserve accumulation, international capital flows, macroeconomic synchronization, and regional monetary and financial cooperation.
Author | : Eiji Ogawa |
Publisher | : |
Total Pages | : 0 |
Release | : 2007 |
Genre | : |
ISBN | : |
After the Asian currency crisis in 1997, the monetary authorities of East Asian countries have been strengthening their regional monetary cooperation. In this paper, we propose a deviation measurement for coordinated exchange rate policies in East Asia to enhance the monetary authorities' surveillance process for their regional monetary cooperation. We calculate an Asian Monetary Unit (AMU) as a weighted average of East Asian currencies following the method used to calculate the European Currency Unit (ECU). Also, we calculate AMU Deviation Indicators which show how much each of the East Asian currencies deviates from a hypothetical benchmark rate in terms of the AMU. Furthermore, we investigate relationships between the AMU Deviation Indicators and the effective exchange rates, which mean international price competitiveness in terms of international trade. We found strong relationships between the AMU Deviation Indicators and the effective exchange rates except for some currencies. The results suggest that monitoring the AMU Deviation Indicator will be useful for the monetary authorities' surveillance in East Asia in order to stabilise their effective exchange rate or price competitiveness among the East Asian countries.
Author | : Duck-Koo Chung |
Publisher | : Rowman & Littlefield |
Total Pages | : 176 |
Release | : 2007-05-01 |
Genre | : Business & Economics |
ISBN | : 0815714181 |
East Asian exchange rates have become a global flashpoint. U.S. policymakers blame artificially low Asian currency values for global imbalances, including America's ballooning current account deficit. The solution, they argue, lies in some combination of greater exchange rate flexibility and the appreciation of Asian currencies against the dollar. Asian officials recognize the need to let their exchange rates rise, but they fear that would hamper growth and cut sharply into the value of their dollar reserves. Toward an East Asian Exchange Rate Regime offers a timely and comprehensive analysis of the resulting debates, drawing on expertise from China, Japan, South Korea, and the United States. The introduction reviews the issues at stake, sketches a variety of proposed exchange rate regimes, and discusses comparisons between East Asia and the West. Subsequent chapters examine the connection between global financial imbalances and East Asian monetary cooperation, China's potential role in regional coordination, the relationship between monetary and trade integration, and different paths toward regional cooperation. Authoritative yet concise, this is an essential primer on East Asian monetary integration. Contributors include Gongpil Choi (Korean Institute of Finance, Federal Reserve Bank of San Francisco), Masahiro Kawai (University of Tokyo, Asian Development Bank), Kwanho Shin (Korea University), Yunjong Wang (SK Institute), Masaru Yoshitomi (RIETI,Tokyo), and Yongding Yu (Chinese Academy of Social Sciences).
Author | : Kuo-Chun Yeh |
Publisher | : |
Total Pages | : 0 |
Release | : 2013 |
Genre | : |
ISBN | : |
An Asian currency unit (ACU) is necessary to deepen Asian financial markets and to convert national currencies into a single monetary policy. However, the experiences of the European Currency Unit and the European Exchange Rate Mechanism crisis in 1992-93 have indicated the danger of the so-called gradual approach. This study evaluates the effects of welfare should the ACU indicator become a long-term constraint of the People's Republic of China and Japan, the big two in East Asia. Our results indicate that the constraints of countries' own baskets (e.g. real effective exchange rates) are still better before the launch of a true single currency. That is, pegging to an ACU indicator could hardly be sustained in the long-run if East Asian countries have not reached a consensus about a regional monetary union.
Author | : R. Rajan |
Publisher | : Springer |
Total Pages | : 258 |
Release | : 2009-03-26 |
Genre | : Business & Economics |
ISBN | : 0230234194 |
This book concentrates on exchange rates and their macroeconomic consequences, analytical and empirical issues relating to currency crises and policy responses and monetary and financial cooperation in Asia. It is truely pan-Asia-focused with chapters on China, Japan, Korea, India and Southeast Asia.
Author | : U-sik Mun |
Publisher | : |
Total Pages | : 66 |
Release | : 2006 |
Genre | : Monetary policy |
ISBN | : |
Author | : Victor C. Pontines |
Publisher | : |
Total Pages | : 33 |
Release | : 2013 |
Genre | : Currency question |
ISBN | : |
"An Asian Currency Unit (ACU) index is constructed using an alternative procedure which minimizes a basket or portfolio of assets expressed in terms of national currencies. Using this estimated ACU index and an ACU Deviation Indicator, the main finding of this study based on the current trajectory of East Asian currencies relative to this regional ACU average or benchmark is that there is a formation of two contrasting groups of countries in the region - one a group of strong currencies and the other a group of weak currencies. The author emphasizes that the implication of this contrasting trajectory in East Asian intra-regional exchange rates is to disturb the competitive trading relationships in the region which may result in wasteful beggar-thy neighbor policies in the region. As emphasized by other recent studies, e.g., Kawai and Takagi (2012), the region needs a kind of framework for exchange rate policy coordination that will promote intra-regional exchange rate stability. The author suggests several ways in which the region can capitalize on using this ACU index in the immediate term for surveillance purposes, particularly, for purposes of assessing 'over- and undervaluation' of the individual currencies from the regional ACU average and for flagging emerging vulnerabilities in individual economies in the region."--Abstract.
Author | : |
Publisher | : World Bank Publications |
Total Pages | : 72 |
Release | : |
Genre | : |
ISBN | : |
Author | : Ronald I. McKinnon |
Publisher | : MIT Press |
Total Pages | : 300 |
Release | : 2005 |
Genre | : Business & Economics |
ISBN | : 9780262134514 |
The policy dilemmas inherent in using the US dollar as the key currency for stabilizing exchange rates in East Asia.