Exchange Rate Coordination in Asia : Evidence using the Asian Currency Unit
Abstractï»¿This paper evaluates the extent of exchange rate coordination among Asian economies using a hypothetical Asian Currency Unit. Rising interdependence among Asian economies makes it vital for these economies to have a certain degree of exchange rate stability. However, the empirical evidence using an Asian Currency Unit suggests a widening deviation in exchange rate movements of the Asian currencies. The deviation has been driven by the adoption of different exchange rate regimes by the participating countries indicating diverse policy objectives. There are a number of institutions in the region that can assist exchange rate coordination and greater economic and financial integration. These institutions, including a multilateralized swap arrangement, a regional surveillance mechanism, and a bond fund; have to be significantly strengthened for them to play a role in fostering greater economic cooperation. The denomination of financial assets in the Asian Currency Unit in transactions involving these institutions would also enhance exchange rate cooperation.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 23321.
Date of creation: Apr 2012
Date of revision:
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Exchange rate coordination; Asia; Asian Currency Unit; exchange rate stability; financial cooperation;
Other versions of this item:
- Gupta, Abhijit Sen, 2012. "Exchange Rate Coordination in Asia: Evidence using the Asian Currency Unit," ADBI Working Papers 356, Asian Development Bank Institute.
- Abhijit Sen Gupta, 2012. "Exchange Rate Coordination in Asia : Evidence using the Asian Currency Unit," Finance Working Papers 23321, East Asian Bureau of Economic Research.
- Abhijit Sen Gupta, 2012. "Exchange Rate Coordination in Asia : Evidence using the Asian Currency Unit," Governance Working Papers 23321, East Asian Bureau of Economic Research.
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- F55 - International Economics - - International Relations and International Political Economy - - - International Institutional Arrangements
- F15 - International Economics - - Trade - - - Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-CWA-2012-08-23 (Central & Western Asia)
- NEP-MON-2012-08-23 (Monetary Economics)
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