Advanced Search
MyIDEAS: Login

Exchange Rate Policy and Regional Integration in Asia

Contents:

Author Info

  • Michel Aglietta
  • Claire Labonne
  • Françoise Lemoine
Registered author(s):

    Abstract

    Asian foreign exchange markets are under pressure. Since 2007, good macroeconomic fundamentals, favourable growth prospects and high interest rates have made the emerging countries a favourite destination for capital. Though the crisis interrupted these flows at the end of 2008, the American monetary policy of "Quantitative Easing" accelerated the inflows of capital because it forced the emerging countries to raise their interest rates to combat inflation. Now, due to its increasingly integrated trade, price competitiveness and stable bilateral exchange rates are important factors in Asia's economic good health. The countries in the area intervene on the foreign exchange markets to prevent their currencies from appreciating. It is not just China that is resorting to this strategy; other countries have been much more active in bearing down on the exchange rate. How can the countries in the area maintain the stability of their exchange rates? As China is obviously the magnet for trade flows within the area, what role does the renminbi play in the exchange rate policies of the other Asian emerging countries? When we look empirically at these questions, we have to ask ourselves whether a de facto monetary area is forming and therefore whether there now exists a process of decoupling from the dollar. Can a loose monetary area form implicitly, without the coordination of regional monetary rules?

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.cepii.fr/PDF_PUB/lettre/2011/let307ang.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by CEPII research center in its journal La Lettre du CEPII.

    Volume (Year): (2011)
    Issue (Month): 307 ()
    Pages:

    as in new window
    Handle: RePEc:cii:cepill:2011-307

    Contact details of provider:
    Postal: 113, rue de Grenelle, 75700 Paris SP07
    Phone: 33 01 53 68 55 00
    Fax: 33 01 53 68 55 01
    Web page: http://www.cepii.fr
    More information through EDIRC

    Related research

    Keywords: FOREIGN EXCHANGE MARKETS; INTERNATIONAL MONETARY SYSTEM; CHINA; YUAN;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:cii:cepill:2011-307. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.