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The post-crisis Exchange Rate Management in Selected East Asian Countries

Author

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  • Hiroyuki Taguchi

    (Government of Japan, Japan)

Abstract

This article examines the post-crisis exchange rate management in the selected East Asian countries, Indonesia, Korea, the Philippines, and Thailand. The main findings are as follows: First, the trends of the coefficient of variation in the monthly nominal exchange rates and foreign exchange reserves revealed that the exchange rate flexibility of all the sample countries had increased under the “soft peg” regime from the pre-crisis period towards the post-crisis period. Second, the result of the Frankel-Wei type of regression analysis with the Chow’s test showed that the Philippines and Korea might reduce the US dollar dominance while Korea and Indonesia might raise the weights assigned to the Japanese yen and the euro respectively, in their post-crisis exchange rate management, and that all the sample countries could raise sensitivity to their domestic inflation rates in their post-crisis exchange rate management. The policy implication in the findings above lies in the significance of inflation rate as one of the factors for determining a reference rate in the exchange rate management.

Suggested Citation

  • Hiroyuki Taguchi, 2007. "The post-crisis Exchange Rate Management in Selected East Asian Countries," Journal of Developing Areas, Tennessee State University, College of Business, vol. 40(2), pages 19-34, January-M.
  • Handle: RePEc:jda:journl:vol.40:year:2007:issue2:pp:19-34
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    Citations

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    Cited by:

    1. Tony Cavoli & Ramkishen S. Rajan, 2005. "Have Exchange Rate Regimes in Asia become More Flexible Post crisis? Re-VISITING the EVIDENCE," Finance Working Papers 22563, East Asian Bureau of Economic Research.
    2. Sajid Ali, 2016. "How does Interest rate effect Exchange rate of Pakistan. Evidence of ARDL Bound Testing Approach," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 1(2), pages 119-133, October.

    More about this item

    Keywords

    East Asia; Exchange Rate Management; U.S. Dollar Peg; Flexibility of Exchange Rate; Sensitivity to Inflation Rate;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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