Fear of Appreciation in East and Southeast Asia: The Role of the Chinese Renminbi
AbstractThe study brings into light the evidence of a fundamental role of the Chinese renminbi in shaping the exchange rate behaviour of other major Asian currencies. The results obtained suggest that there is an additional dimension to the ‘fear of appreciation’ or ‘fear of floating-in-reverse’ behaviour, initially coined by Levy-yeyati and Sturzenegger (2007) with regard to the cases of these major Asian currencies. In particular, it is found that there is a greater degree of aversion to appreciation of these same Asian currencies, specifically, the Philippine peso and the Thailand baht against the renminbi than against the US dollar. This heightened fear of appreciation against the Chinese currency confirms that trade competition indeed matters in this part of the world and that the fear continues to play a central role in the exchange rate management behaviour of major Asian currencies. This is understandable as the rising role of China as a major trading hub in the region as well as globally, renders greater influence to the renminbi on the rest of the currencies in the region.
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Bibliographic InfoThis book is provided by South East Asian Central Banks (SEACEN) Research and Training Centre in its series Staff Papers with number sp78 and published in 2010.
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Other versions of this item:
- Pontines, Victor & Siregar, Reza Y., 2012. "Fear of appreciation in East and Southeast Asia: The role of the Chinese renminbi," Journal of Asian Economics, Elsevier, vol. 23(4), pages 324-334.
- Pontines, Victor & Siregar, Reza Y., 2010. "Fear of Appreciation in East and Southeast Asia: The Role of the Chinese Renminbi," MPRA Paper 25408, University Library of Munich, Germany.
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- F31 - International Economics - - International Finance - - - Foreign Exchange
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