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Wednesday, May 20, 2020 | History

3 edition of Assessing China"s exchange rate regime found in the catalog.

Assessing China"s exchange rate regime

Jeffrey A. Frankel

Assessing China"s exchange rate regime

by Jeffrey A. Frankel

  • 174 Want to read
  • 13 Currently reading

Published by National Bureau of Economic Research in Cambridge, Mass .
Written in English

    Subjects:
  • Foreign exchange rates -- Government policy -- United States -- Econometric models,
  • Foreign exchange rates -- China -- 21st century -- Econometric models

  • About the Edition

    This paper examines two related issues: (a) the implicit methodology used by the U.S. Treasury in determining whether China and America"s other trading partners manipulate their exchange rates, and (b) the nature of the Chinese exchange rate regime since July 2005. On the first issue, we investigate the roles of economic variables consistent with the IMF definition of manipulation - the partners" overall current account/GDP, its reserve changes, and the real overvaluation of its currency - but also some variables suggestive of American domestic political considerations -- the bilateral trade balance, US unemployment, and an election year dummy. The econometric results suggest that the Treasury verdicts are driven heavily by the US bilateral deficit, though other variables also turn out to be quite important. On the issue of China"s de facto exchange rate regime, we apply the technique introduced by Frankel and Wei (1994) to estimate implicit basket weights, adding several refinements. Within 2005, the de facto regime remained a peg to the dollar. However, there was a modest but steady increase in flexibility subsequently. We test whether US pressure has promoted RMB flexibility. We also test whether the recent appreciation against the dollar is due to a trend appreciation against the reference basket or a declining weight on the dollar in the reference basket, and suggest that they have different policy implications.

    Edition Notes

    StatementJeffrey A. Frankel, Shang-Jin Wei.
    SeriesNBER working paper series -- no. 13100., Working paper series (National Bureau of Economic Research) -- working paper no. 13100.
    ContributionsWei, Shang-Jin., National Bureau of Economic Research.
    The Physical Object
    Pagination79 p. :
    Number of Pages79
    ID Numbers
    Open LibraryOL17634054M
    OCLC/WorldCa137302926

      Exchange rate regime has often been likened to monetary policies and it may be concluded that both the processes are actually dependent on a lot of similar factors. There are some basic exchange rate regimes that are used nowadays â the floating exchange rate, the pegged float exchange rate and the fixed or pegged exchange rate. “Reforming the RMB Exchange rate regime”. It revalued the yuan by 2 per cent to yuan per USD. It said China will “reform the exchange regime by moving into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. RMB will no longer be pegged to the US dollar and the RMB.

    exchange rate. They have more available policy tools in their toolkit to help them achieve the goal. We believe that the exchange rate regime of the RMB will ultimately shift to a floating one as other major economies in the world. The floating of the RMB could come in the second half of Although certain.   China's move to allow a more flexible trading of the renminbi exchange rate could help maintain the flexibility of the country's monetary policy as cross-border financial flows increase. We believe the increased exchange rate flexibility could also prevent the build-up of risks to the sovereign credit rating (AA-/Stable/A-1+; cnAAA/cnA-1+).

    Frankel, J. A. and S. Wei () Assessing China’s Exchange Rate Regime. NBER Working Papers (Cambridge, MA: National Bureau of Economic Research). NBER Working Papers (Cambridge, MA: National Bureau of Economic Research).Cited by: 2.   China will stick to its managed floating exchange rate framework to keep the yuan currency basically stable, a deputy governor of the People's Bank of China (PBOC) said on : Reuters Editorial.


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Assessing China"s exchange rate regime by Jeffrey A. Frankel Download PDF EPUB FB2

On the issue of China's de facto exchange rate regime, we apply the technique introduced by Frankel and Wei () to estimate implicit basket weights, adding several refinements. Withinthe de facto regime remained a peg to the dollar.

However, there was a Cited by: The book is split into four sections, firstly- an introduction to modern exchange rate regimes (this is very short and just sets stage and discusses the books contents), the theory and practice of exchange rate regimes, to the exchange rate consequences of exchange rate regimes and finally the economic consequences of exchange rate by: Assessing China's Exchange Rate Regime.

most studies on the China's exchange rate regimes were investigating whether the Chinese Yuan was moving away from the long-standing U.S. Dollar peg.

China announced the switch to a new exchange rate regime in July The exchange rate – after a minor initial revaluation of %– would be set with reference to a basket of other currencies (with numerical weights unannounced), allowing a movement of up to ± % in bilateral exchange rates within any given by: Downloadable.

This paper examines two related issues: (a) the implicit methodology used by the U.S. Treasury in determining whether China and America's other trading partners manipulate their exchange rates, and (b) the nature of the Chinese exchange rate regime since July On the first issue, we investigate the roles of economic variables consistent with the IMF definition of.

China’s exchange rate regime has undergone gradual reform since the move away from a fixed exchange rate in 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 by: 4.

Move away from a fixed exchange rate, continued stability with respect to the U.S. dollar (Jul – Jul ) Reform undertaken to increase the flexibility of the exchange rate regime.

On JAssessing Chinas exchange rate regime book announced a major reform to its exchange rate regime, from fixing the yuan rate withCited by: 4. Yu Yongding, then a member of PBOC's monetary policy committee, described the foreign exchange regime China adopted in July as a managed floating system based on the so-called BBC rules--band, basket, and crawling (allowing the exchange rate to appreciate or depreciate at a more or less predictable rate)--that appear in textbooks on international finance (Yu, ).

What exchange rate regimes should China move to. This short paper focuses on the second issue. After a brief discussion of the evaluation of China's exchange rate regimes over the last two decades, we analyze choices of exchange rate regimes for China.

China's exchange rate regimes since the s. Along with China's gradualism economic Cited by: Reforms of China’s exchange rate regime have been a key factor underlying the country’s growing participation in global trade since economic reform began in From until the late s, the state fixed China’s exchange rate at a highly overvalued level as part of the country’s import-substitution industrialization Size: KB.

Assessing China's exchange rate regime "The IMF Articles of Agreement forbid a country from manipulating its currency for unfair advantage. The US Treasury has been legally required since to report to Congress biannually regarding whether individual trading.

Get this from a library. Assessing China's exchange rate regime. [Jeffrey A Frankel; Shang-Jin Wei; National Bureau of Economic Research.] -- This paper examines two related issues: (a) the implicit methodology used by the U.S. Treasury in determining whether China and America's other trading partners manipulate their exchange rates, and.

Exchange Rate Regimes in the Modern Era (The MIT Press) - Kindle edition by Klein, Michael W., Shambaugh, Jay C. Download it once and read it on your Kindle device, PC, phones or tablets. Use features like bookmarks, note taking and highlighting while reading Exchange Rate Regimes in the Modern Era (The MIT Press)/5(3).

This book explores my perspective on a number of facets concerning China’s monetary policy and theory. Specifically, the book covers three salient issues: China’s monetary policy instruments, its monetary policy framework, and its RMB exchange rate regime.

China’s Monetary Policy Instruments. Assessing Chinese Currency Regime () Huge trade surplus with the United States and the rest of the world that leads international pressure on Beijing to let the Yuan rise to balance global trade. – Dec: Premier Wen Jiabao says China will move gradually towards a flexible currency regime.

– Jul: China revalues the Yuan and revises rules governing its currency. 1 On 21st Julythe Chinese Central Bank revalued the yuan from to per US dollar. This small revaluation (%) was accompanied by an official modification of the exchange rate system. The authorities announced that “the yuan will be no longer pegged to the US dollar” and that “China will reform the exchange rate regime by moving into a managed floating exchange rate Cited by: 2.

Under China’s de facto pegged exchange rate regime, domestic policies are oriented to the achievement of an external target. This implies a cost in terms of loss of control over domestic monetary policy: liquidity expands and contracts to preserve the foreign exchange rate of the domestic currency vis-à-vis the anchor currency.

Frankel, Jeffrey A. and Shang-Jin Wei (), “Assessing China’s Exchange Rate Regime,” Economic Policy, Fung, K. and Lawrence J. Lau ( 1), “New Estimates of the United. On Jafter more than a decade of strictly pegging the renminbi to the U.S.

dollar at an exchange rate ofthe People’s Bank of China (PBOC a) announced a revaluation of the currency and a reform of the exchange rate regime. The revaluation puts the renminbi at against the dollar, which amounts to an appreciation of %. Both exporters and importers are faced with currency risks when dealing with China, and the devaluation of the RMB in August shows just how volatile things can be.

When officials decided to lower the RMB’s trading band, its market exchange rate fell percent in the space of a : Jim Vrondas. Indicator number two: China's real effective exchange rate-widely regarded as a more comprehensive and superior measure of China's overall competitive position than the nominal exchange rate between the US dollar and the Chinese RMB-has actually depreciated by about 2 percent since either the dollar peak in February or the dollar's average value in 3 External payment adjustments call for appreciations of real effective exchange rates.Get this from a library!

China's exchange rate regime. [Zhongguo fa zhan yan jiu ji jin hui,;] -- "The imbalance between China's currency, the RMB, and those of other countries is widely regarded as a major problem for the world economy. There was a reform of China's exchange rate mechanism in.This paper investigates exchange rate pass-through into consumer prices by considering the nature of the shock triggering currency movements.

By individually estimating structural factor-augmented vector autoregression models for 55 countries, monetary policy shocks are shown to be associated with higher exchange rate pass-through measures compared to other domestic shocks, while global shocks Author: Jongrim Ha, M.

Marc Stocker, Hakan Yilmazkuday.