Exchange Rate Regime Verifi cation: Has China Actually Moved from a Dollar Peg to a Basket Peg? Peg?
AbstractAn attempt is made to verify the exchange rate regime that China has been following since 21 July 2005 when a policy shift was implemented, presumably taking China from a dollar peg to a basket peg. The results show that while a regime of simple and strict dollar peg has indeed been abandoned, the evidence does not support the proposition that the current exchange rate regime is a basket peg. It is suggested, based on the empirical results, that the current Chinese regime is some sort of a discretionary crawling peg against the U.S. dollar. It is argued that this regime is consistent with the Chinese objectives of maintaining a competitive advantage while avoiding a trade war with the U.S.
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Bibliographic InfoArticle provided by Camera di Commercio di Genova in its journal Economia Internazionale / International Economics.
Volume (Year): 62 (2009)
Issue (Month): 1 ()
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China; Exchange Rate Regime Verification; Basket Peg; Crawling Peg;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
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