RENMINBI AS NUMBER TWO IN EAST ASIA
Journal Title: Asian Economic and Financial Review - Year 2013, Vol 3, Issue 1
Abstract
This paper investigates the emerging influence of the Chinese renminbi on the exchange rate movements of East Asian currencies. China stopped pegging her currency to the US dollar and moved into a managed floating exchange rate system on July 21, 2005. The change in China’s exchange rate regime opens a window of opportunity to investigate the influence of renminbi on the exchange rate movements of East Asian currencies. This paper uses daily exchange rate data from July 24, 2005 to October 31, 2011 for empirical analysis. Empirical results from this paper reaffirm the dominant position of the US dollar in East Asia. Our results indicate that the influence of the renminbi on the daily exchange rate movements of East Asian currencies is second only to that of the dollar. With the growing importance of the Chinese economy, the renminbi has begun to exert its influence on the exchange rate determinations in East Asia at least in the very short run. We have done extensive robustness checks to ensure the validity of our estimation results. In the 1990s and early 2000s, many studies document an increasing influence of the Japanese yen and suggest the emergence of a yen bloc in East Asia. While this issue is not the focus of the present paper, results of this paper do cast doubts on the making and prospect of a yen bloc in East Asia.
Authors and Affiliations
Jyh-Dean Hwang| Department and Graduate Institute of International Business ,National Taiwan University, Taipei, Taiwan.
Keywords
Related Articles
- EP ID EP1869
- DOI -
- Views 516
- Downloads 37
VOLATILITY MODELLING AND PARAMETRIC VALUE-AT-RISK FORECAST ACCURACY: EVIDENCE FROM METAL PRODUCTS
In this paper, we investigate the one-day-ahead VaR and ES accuracy of four metal daily return series including Aluminium, Copper, Nickel and Zinc. Since, all sample presents volatility clustering, volatility asymmetry,...
Market Liquidity Behaviour in Futures Markets: Empirical Evidence
In this study, we examine the relations between the three keys variables of liquidity such as trading volume, bid-ask spread, and intraday price volatility. Hausman’s (1978) tests of specification confirmed that trading...
GLOBAL ENERGY PRICES AND THE BEHAVIOR OF ENERGY STOCK PRICE FLUCTUATIONS
This study investigates the impact of global crude oil and global natural gas prices on the stocks price movements of the energy companies using multivariate regression and impulse response function analysis. Our data se...
THE TAIWANESE BUSINESSMEN ASSESS THE INVESTMENT ENVIRONMENT OF CHINA – CONSTRUCTION AND APPLICATION OF PR AHP PROGRAM
The economy of China has been rapidly growing in recent years. One of the important reasons is that there are a large number of foreign capital investments made in China. Creating a good investment environment in order t...
Factors Affecting the Nominal Exchange Rate of Pakistan: An Econometric Investigation (1982-2008)
Which macroeconomic factors determine the nominal exchange rate of Pak-rupee against US dollar during the period 1982-2008? This issue has been investigated in this paper by using Ordinary Least Squares and Johansen’s Co...