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Exchange Rate Regimes and Monetary Independence in East Asia


  • Chang-Jin Kim

    (KIEP - Korea Institute for International Economic Policy)

  • Jong-Wha Lee


This paper examines whether changes in exchange rate arrangements have affected monetary independence in East Asian countries after the 1997 Asian crisis. We find that the sensitivity of local to U.S. interest rates has declined for many Asian countries since they adopted floating exchange rate regimes after the crisis. This empirical finding suggests that the choice of exchange rate regime is an important factor for the independence of monetary policy. Floating regimes appear to offer East Asian countries at least some degree of monetary independence after the East Asian crisis.

Suggested Citation

  • Chang-Jin Kim & Jong-Wha Lee, 2002. "Exchange Rate Regimes and Monetary Independence in East Asia," Finance Working Papers 21765, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:financ:21765

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    More about this item


    exchange rate regime; monetary independence; East-Asia;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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