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Currency Co-Movements In Asia-Pacific: The Regional Role Of The Renminbi

Author

Listed:
  • Daniela Marconi

    (Bank of Italy)

Abstract

The economic and political influence of China in the Asia-Pacific region is growing; the internationalization of the Chinese currency, the renminbi (RMB), add an additional channel of influence. This paper assesses the evolution of exchange rate co-movements against the US dollar within the region and finds that the RMB has been exerting a growing influence. The degree of influence varies considerably across currencies. On the one hand, the Indonesian rupiah, the Korean Won, the Malaysian ringgit, the Singaporean dollar, and the Taiwanese dollar show very strong co-movements with the RMB, while, on the other hand, the Australian dollar and the New Zealand dollar are not affected. Furthermore, the study confirms that Asian currencies move as if driven by an objective to stabilize the effective exchange rate, avoiding excessive appreciation against the USD.

Suggested Citation

  • Daniela Marconi, "undated". "Currency Co-Movements In Asia-Pacific: The Regional Role Of The Renminbi," GRU Working Paper Series GRU_2016_023, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    • Handle: RePEc:cth:wpaper:gru_2016_023
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    File URL: https://www.cb.cityu.edu.hk/ef/doc/GRU/WPS/GRU%232016-023%20Daniela.pdf
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    Cited by:

    1. Daniela Marconi & Lorenzo Bencivelli & Anna Marra & Alessandro Schiavone & Raffaele Tartaglia-Polcini, 2016. "Offshore RMB markets in Europe: prospects for greater financial integration between Europe and China," Questioni di Economia e Finanza (Occasional Papers) 334, Bank of Italy, Economic Research and International Relations Area.
    2. Zhang, Wenwen & Zhan, Yaosong & Liang, Yiwei, 2025. "Financial openness, major events, and exchange rate linkage: Empirical analysis based on the DCC-MIDAS model," International Review of Financial Analysis, Elsevier, vol. 106(C).
    3. Daniela Marconi, "undated". "Currency Co-Movements In Asia-Pacific: The Regional Role Of The Renminbi," GRU Working Paper Series GRU_2016_023, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.
    4. Shekhar Hari Kumar & Vimal Balasubramaniam & Ila Patnaik & Ajay Shah, 2020. "Who cares about the Renminbi?," 2020 Papers pha1373, Job Market Papers.
    5. Hwee K. Chow, 2021. "Connectedness of Asia Pacific forex markets: China's growing influence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3807-3818, July.

    More about this item

    Keywords

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    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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