Choice of Exchange Rate Regime: Currency Board (Hong Kong) or Monitoring Band (Singapore)?

2002 ◽  
Vol 41 (4) ◽  
pp. 538-556 ◽  
Author(s):  
Ramkishen S. Rajan ◽  
Reza Siregar
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Currency Board

A RE-STATEMENT OF SINGAPORE'S EXCHANGE RATE AND MONETARY POLICIES

2003 ◽  
Vol 48 (02) ◽  
pp. 201-212 ◽  
Author(s):  
PAUL S. L. YIP
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Band System ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
Currency Board ◽  
Monetary Policies ◽  
Rate Level ◽  
Rate Policy ◽  
Exchange Rate Level

This policy note, which focuses on Singapore's monetary and exchange rate policies, has a number of objectives. First, it highlights the fact that the Monetary Authority of Singapore (MAS) is equipped with a powerful tool to target the exchange rate level it desires (within limits). Second, it reviews Singapore's exchange rate policy since 1980 and explains that the de facto policy is far more complicated and flexible than the simplistic but oft-noted description of the MAS pursuing a "strong Singapore dollar" policy. Specifically, the paper argues that Singapore's exchange rate regime is an ideal example of the monitoring band system favoured by John Williamson. Third, the paper contrasts the Singapore currency regime with the relatively more inflexible currency board arrangement (CBA) operated in Hong Kong. The relative advantages of Singapore's flexible monitoring band arrangement over Hong Kong's rigidly fixed CBA are highlighted.

Greece and Hong Kong

2017 ◽  
Author(s):  
Yue Chim Richard Wong
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Economic Shocks ◽  
Fixed Rate ◽  
Policy Tool ◽  
Monetary Independence ◽  
Monetary Unit ◽  
The Us ◽  
Us Dollar

Both Greece and Hong Kong have unified exchange rate regimes. Greece, as a member of the Eurozone, uses the euro as its local monetary unit. Hong Kong, under the linked exchange rate regime, uses a local monetary unit with its currency fully backed by the US dollar at a fixed rate. As a consequence, both economies have surrendered monetary independence to an external monetary authority. Both have committed to not using currency devaluation or revaluation as a policy tool for stabilizing their economies when they are struck by financial and economic shocks. The only way they could regain monetary independence would be, in Greece’s case, exiting the Eurozone and reissuing the drachma, and in Hong Kong’s case, breaking the linked exchange rate and putting in place an alternative monetary arrangement for issuing the Hong Kong dollar. An economy that has joined a unified exchange rate regime will face situations from time to time when the requirements of global economic integration will be in conflict with the requirements of a political democracy.

Chancen und Risiken einer Dollarisierung in Argentinien

2003 ◽  
Vol 52 (1) ◽  
Author(s):  
Ralph Setzer
Keyword(s):  
Exchange Rate ◽  
Financial Integration ◽  
Exchange Rate Regime ◽  
The United States ◽  
Optimum Currency Area ◽  
Currency Board ◽  
Currency Area ◽  
International Investors ◽  
Strong Candidate ◽  
Optimum Currency

AbstractThe collapse of the Argentinean Currency Board revived the debate about the optimal exchange rate regime for Argentina. Given its large exposure to nervous international investors, Argentina is a strong candidate for dollarization, which could provide lower inflation and higher financial integration with the United States. However, Argentina’s poor qualifications for a fixed exchange rate under the traditional optimum currency area criteria and the absence of adequate labor market and fiscal policy structures indicate that dollarization would suffer from the same problems as the Currency Board system. Thus, dollarization, in advance of other fundamental reforms seems a risky strategy.

scholarly journals On the Maintenance Costs and Exit Costs of the Peg in Hong Kong

2005 ◽  
Vol 08 (03) ◽  
pp. 377-403 ◽  
Author(s):  
Paul S. L. Yip
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Policy Maker ◽  
Band System ◽  
Currency Board ◽  
Rate System ◽  
Maintenance Costs ◽  
Exit Costs ◽  
Exchange Rate System ◽  
Board System

This paper attempts to pioneer a discussion on the exit and maintenance costs of the Currency Board System (CBS) in Hong Kong, and hopes to invite more debate on the issue. It suggests that the exit costs will depend on the timing of an exit, whether there are supplementary packages to mitigate the exit costs, and the choice of an alternative exchange rate system. In particular, it suggests that the monitoring band system favored by Williamson (2000) could help to reduce the exit costs. In addition, the paper points out that there are ways to reduce both the exit and maintenance costs. It then proposes a reform that could benefit the economy regardless of whether the policy maker eventually chooses to continue with or abandon the peg. The study is not only crucial to Hong Kong, but also important to other economies with a CBS as well as to the debate on the choice of exchange rate system.

scholarly journals Foreign currency regimes

2004 ◽  
Vol 47 (3-4) ◽  
pp. 233-248
Author(s):  
Duska Gajic
Keyword(s):  
Exchange Rate ◽  
Foreign Currency ◽  
Exchange Rate Regime ◽  
Currency Union ◽  
Final Conclusion ◽  
Currency Board ◽  
Target Zone ◽  
Advantages And Disadvantages ◽  
Theoretical Analyses ◽  
Negative Outcome

There is no exchange rate regime that can be declared as the best one. Each regime has both advantages and disadvantages. In some situations, a regime can be very positive and in an other, it may have rather negative outcome. In the theory, regimes are classified as follows: currency union, currency board, "truly fixed", adjustable peg, crawling peg, basket peg, target zone, dirty float, free float. This paper addresses "fixed vs. flexible regime" issue and provides description of all the requirements, consequences, benefits, weaknesses and possibilities related to them. The final conclusion is that flexible regimes are more frequently used and preferred by most economists. After all theoretical analyses, policymakers are those who make decisions about the optimal exchange rate regime for the economy concerned.

A COMPARATIVE STUDY OF EXCHANGE RATE REGIMES AND MACRO-INSTABILITIES IN THE TWIN ECONOMIES OF SINGAPORE AND HONG KONG

2007 ◽  
Vol 52 (01) ◽  
pp. 93-116 ◽  
Author(s):  
YUE MA ◽  
Y. Y. KUEH ◽  
RAYMOND C. W. NG
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Open Economy ◽  
Exchange Rate Regime ◽  
Small Open Economy ◽  
Prototype Model ◽  
Internal Factors ◽  
Monetary Authorities ◽  
The Stability ◽  
The One

Based on a small, open-economy IS-LM prototype model, this paper examines the sources of macroeconomic instabilities in Hong Kong and Singapore operating under two different currency board arrangements. The empirical findings suggest that in general, both external and internal factors contribute to the macroeconomic volatilities observed in the two economies. There is evidence of a tradeoff between exchange rate and interest rate targeting for the stability of money supply in Singapore. Our findings have important implications for Mainland China's monetary authorities in the transition from a hard-peg exchange rate regime like Hong Kong to a basket-link system like the one in Singapore.

scholarly journals Macroeconomic regime and labor market. The Argentine experience of the past two decades

Nova Economia ◽  
2015 ◽  
Vol 25 (spe) ◽  
pp. 863-890
Author(s):  
Luis Beccaria ◽  
Roxana Maurizio
Keyword(s):  
Exchange Rate ◽  
Labor Market ◽  
Real Exchange Rate ◽  
Negative Impact ◽  
Exchange Rate Regime ◽  
Currency Board ◽  
International Context ◽  
The Past ◽  
Positive Performance ◽  
Employment Generation

Abstract: This document analyzes the interactions between macroeconomic regimes, employment generation and the dynamics of labor incomes in Argentina under two different macroeconomic regimes: the currency board regime of the 1990s and the high real exchange rate regime that followed. The former, characterized by a strong currency overvaluation, had a negative impact on economic activity and the labor market. However, the maintenance of a competitive real exchange rate does not by itself guarantee the sustained positive performance of the labor market, as it became evident in Argentina during the 2000s. Although the sizable depreciation of the peso -together with a positive international context- favored the expansion of output and employment, the initial concern of maintaining the real exchange rate at a competitive level was not continued with policies aimed to counteract the appreciation trend that appeared a few years after the implementation of the new regime.

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