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Have Exchange Rate Regimes in Asia Become More Flexible Post Crisis? Re-visiting the Evidence

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  • Tony Cavoli

    ()
    (School of Economics, University of Adelaide, Australia.)

  • Ramkishen Rajan

    ()
    (School of Public Policy, National University of Singapore.)

Abstract

There is a broad consensus that the soft US dollar pegs operated by a number of Asian countries prior to 1997 contributed to the regional financial crisis of 1997-98. There is, however, much less agreement on the types of exchange rate regimes operated by many Asian countries since the crisis. Can they still be characterized as soft US dollar pegs, or have they become genuinely more flexible? This paper revisits the evidence regarding the extent of exchange rate flexibility in the five Asian countries (Indonesia, Korea, Malaysia, the Philippines and Thailand) post crisis using alternative methodologies and data up to mid 2004. Using alternative methodologies is critical as different measures or parameters could lead to diametrically opposite conclusions regarding the type of exchange rate regime operated by a country.

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Bibliographic Info

Paper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2005-03.

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Length: 40 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:adl:cieswp:2005-03

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Keywords: Asia; exchange rate regime; inflation targeting; interest rates; reserves; soft dollar peg;

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References

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Cited by:
  1. Vitalie Ciubotaru, 2012. "Identifying the De Facto Exchange Rate Regime for Moldova: A State-Space Approach," Discussion Papers in Economics and Business 12-10, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  2. Thomas Willett & Eric M.P. Chiu & Sirathorn (B.J.) Dechsakulthorn & Ramya Ghosh & Bernard Kibesse & Kenneth Kim & Jeff (Yongbok) Kim & Alice Ouyang, 2011. "Classifying international aspects of currency regimes," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 3(4), pages 288-303, November.
  3. Tony Cavoli & Ramkishen S. Rajan, 2006. "Inflation Targeting Arrangements in Asia: Exploring the Role of the Exchange Rate," SCAPE Policy Research Working Paper Series 0603, National University of Singapore, Department of Economics, SCAPE.
  4. Cavoli, Tony, 2009. "Is fear of floating justified?: The East Asia experience," Journal of Policy Modeling, Elsevier, vol. 31(1), pages 1-16.
  5. Ramkishen S. Rajan & Tony Cavoli, 2006. "The Extent of Exchange Rate Flexibility in India: Basket Pegger or Closet US Dollar Pegger?," Working Papers id:424, eSocialSciences.

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