scholarly journals (DE)STABILIZING EXCHANGE RATE STRATEGIES IN EAST ASIAN MONETARY AND ECONOMIC INTEGRATION

2016 ◽  
Vol 61 (02) ◽  
pp. 1640021 ◽  
Author(s):  
GUNTHER SCHNABL ◽  
KRISTINA SPANTIG
Keyword(s):  
Exchange Rate ◽  
East Asia ◽  
East Asian ◽  
Monetary Integration ◽  
Integration Process ◽  
Currency Exchange ◽  
The Us ◽  
Us Dollar ◽  
Japanese Yen ◽  
Chinese Yuan

The East Asian monetary integration process is at the crossroads. Given very benign liquidity conditions in the US, the prevailing common US dollar peg has contributed to growing macroeconomic and financial instability in the region. This has sparked demands to embark on an independent monetary integration process in East Asia. The paper shows that, however, neither the Japanese yen nor the Chinese yuan can challenge the US dollar as anchor currency in the region. Large fluctuations of the Japanese yen against the US dollar have undermined the potential of the Japanese yen to become a regional anchor currency. Exchange rate stability of the Chinese yuan against the US dollar has enhanced intra-regional exchange rate stability and growth, stressing the potential of the Chinese yuan to emerge as a regional anchor currency. Yet, it is shown that underdeveloped Chinese capital markets and financial repression originating in US low interest rate policies constitute an insurmountable impediment for the Chinese yuan to gain anchor currency status in East Asia. Empirical estimations provide evidence in favor of positive growth effects of the exchange rate stability against the US dollar in East Asia.

scholarly journals CAN GOLD EFFECTIVELY HEDGE RISKS OF EXCHANGE RATE?

2013 ◽  
Vol 14 (5) ◽  
pp. 833-851 ◽  
Author(s):  
Kuan-Min Wang
Keyword(s):  
Exchange Rate ◽  
South African ◽  
Threshold Model ◽  
Monthly Data ◽  
Risk Hedging ◽  
Exchange Rate Fluctuations ◽  
The Us ◽  
Us Dollar ◽  
Japanese Yen ◽  
Dollar Depreciation

This study tests whether gold can effectively hedge exchange rate risks. We take into account the asymmetric characteristic of exchange rate fluctuations and use the dynamic panel threshold model in order to select gold prices in major gold-related currencies in the world: the Australian dollar, the Canadian dollar, the euro, the Indian rupee, the Japanese yen, the South African rand, and the British pound. Using monthly data from January 1999 to January 2010, with lagged one-period exchange rate returns (US dollar depreciation rate) as the threshold variable, the estimation results suggest that there are two thresholds at –7.5% and –3.7%. These can be divided into regime 1 (exchange rate returns ≤ –7.5%), regime 2 (–7.5% < exchange rate returns ≤ –3.7%), and regime 3 (exchange rate returns > –3.7%). Regarding the effectiveness of gold hedging, regime 2 is higher than is regime 3. The risk hedging effect of regime 1 is not significant because it might be caused by the excessive devaluation of the US dollar in the short-term and the overshooting of the exchange rate adjustment, making gold unable to hedge the devaluation risks of the US dollar.

Real Exchange Rate Behavior under Peg: Evidence from the Chinese RMB and Malaysian MYR

2009 ◽  
Vol 12 (01) ◽  
pp. 141-158 ◽  
Author(s):  
Yongjian E ◽  
Anthony Yanxiang Gu ◽  
Chau-Chen Yang
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Real Exchange Rates ◽  
Exchange Rate Volatility ◽  
The Us ◽  
Rate Behavior ◽  
Japanese Yen ◽  
Chinese Yuan ◽  
Real Exchange Rate Volatility

The exchange-rate behavior of the Chinese yuan (RMB) and the Malaysian ringgit (MYR) indicates that the real exchange rate volatility of both the pegged currency/the anchor currency (the US dollar), and the pegged currency/the non-anchor currencies (Japanese yen and British pound) are lower under the pegged regime. The dynamic behavior of the pegged currencies' real exchange rates is consistent with the anchor currency as the speed of convergence of the Big Mac real exchange rates of the RMB, MYR, and the dollar against the floating currencies are almost identical during the pegged period. This may be due to similar inflation rate movements in the related economies. These results do not support the opinion that China has manipulated the value of its currency.

scholarly journals Performance Of Deterministic And Stochastic Trends Models In Forecasting The Behavior Of The Canadian Dollar And The Japanese Yen Against The US Dollar

2011 ◽  
Vol 5 (12) ◽  
Author(s):  
Arav Ouandlous
Keyword(s):  
Exchange Rate ◽  
Canadian Dollar ◽  
Forecast Performance ◽  
Stochastic Trends ◽  
The Us ◽  
Modeling And Forecasting ◽  
Rate Behavior ◽  
Us Dollar ◽  
Exchange Rate Models ◽  
Japanese Yen

The literature on modeling and forecasting exchange rate behavior shows that complex forecasting exchange rate models do not often outperform ARIMA models. We show that the same forecasting models applied to forecast the behavior of the Canadian dollar and the Japanese Yen against the US dollar produced varying forecast performance.

scholarly journals THE EFFECT OF EXCHANGE RATE CHANGES ON TRADE IN EAST ASIA

2011 ◽  
Vol 02 (01) ◽  
pp. 85-102 ◽  
Author(s):  
WILLEM THORBECKE
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
East Asian ◽  
Value Added ◽  
Domestic Economy ◽  
Production Networks ◽  
Regional Production ◽  
The Us ◽  
Exchange Rate Changes ◽  
Chinese Yuan

This paper considers how exchange rates affect East Asian trade. The evidence indicates that exports produced within regional production networks depend on exchange rates throughout the region while labour-intensive exports depend on exchange rates in the exporting country. These results make sense since the majority of the value-added of processed exports come from imported parts and components while most of the value-added of labour-intensive exports comes from the domestic economy. Recent findings also indicate that imbalances between China and the US are a major outlier and that an appreciation of the Chinese yuan (CNY) is necessary to reduce these imbalances.

Exchange rate persistence of the Chinese yuan against the US dollar in the NDF market

2015 ◽  
Vol 51 (4) ◽  
pp. 1399-1414 ◽  
Author(s):  
Carlos P. Barros ◽  
Luis A. Gil-Alana ◽  
Zhongfei Chen
Keyword(s):  
Exchange Rate ◽  
The Us ◽  
Us Dollar ◽  
Chinese Yuan

Artificial Neural Network Model with PSO as a Learning Method to Predict Movement of the Rupiah Exchange Rate against the US Dollar

2021 ◽  
pp. 81
Author(s):  
Eko Verianto ◽  
Budi Sutedjo Dharma Oetomo
Keyword(s):  
Neural Network ◽  
Artificial Neural Network ◽  
Exchange Rate ◽  
Pso Algorithm ◽  
Learning Method ◽  
Currency Exchange ◽  
Currency Exchange Rate ◽  
The Us ◽  
Us Dollar ◽  
Artificial Neural

The movement of currency exchange rate can be predicted in the next few days, this is used by economic actors to get profit. Artificial Neural Network with the backpropagation learning method is good enough to use for forecasting time series data, it's just that in its application this method was considered to have shortcomings such as a long training time to achieve convergence. The purpose of this research is to form a Multilayer Perceptron Artificial Neural Network model with the Particle Swarm Optimization (PSO) algorithm as a learning method in the case of currency exchange rate prediction. This research produced a model that can predict the movement of the Rupiah exchange rate against the US Dollar, while the model formed was the MLP-PSO model with an error rate of 5.6168 x 10-8, slightly better than the MLP-BP model with an error rate of 6.4683 x 10-8. These results indicated that the PSO algorithm can be used as a learning algorithm in the Multilayer Perceptron Artificial Neural Network.

scholarly journals IS EAST ASIA AS PREPARED AS EUROZONE FOR MONETARY UNION?

2012 ◽  
Vol 13 (3) ◽  
pp. 471-488 ◽  
Author(s):  
Chee-Heong Quah
Keyword(s):  
Exchange Rate ◽  
East Asia ◽  
Monetary Union ◽  
Exchange Rate Regime ◽  
Monetary Integration ◽  
Interesting Observation ◽  
The Us ◽  
Recent Developments ◽  
Optimum Currency ◽  
Reference Country

Based on optimum currency areas (OCA) theory and recent developments in the exchange rate regime literature, this paper evaluates the level of preparedness of East Asia for monetary integration by using the EMU as benchmark. Ten macroeconomic dimensions are explored in which the first five facets are measured relative to a reference country, namely the US, Japan, or China whilst the remaining five facets are measured in absolute terms, over the most recent years. In some ways, the exercise does signify the relative economic dominance of the three largest economies to the region. Results suggest that East Asia might be fairly prepared for a monetary integration especially when the reference country is the US. Another interesting observation is that amongst the eurozone founding members, Ireland has shown the lowest degree of conformity in a number of the criteria.

scholarly journals Exchange Rates and Monetary Fundamentals: What Do We Learn from Linear and Nonlinear Regressions?

2014 ◽  
Vol 2014 ◽  
pp. 1-14 ◽  
Author(s):  
Guangfeng Zhang
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Correction Model ◽  
Exchange Rate Dynamics ◽  
Long Run ◽  
Exchange Rate Movements ◽  
Short Run ◽  
Us Dollar ◽  
Linear And Nonlinear ◽  
Japanese Yen

This paper revisits the association between exchange rates and monetary fundamentals with the focus on both linear and nonlinear approaches. With the monthly data of Euro/US dollar and Japanese yen/US dollar, our linear analysis demonstrates the monetary model is a long-run description of exchange rate movements, and our nonlinear modelling suggests the error correction model describes the short-run adjustment of deviations of exchange rates, and monetary fundamentals are capable of explaining exchange rate dynamics under an unrestricted framework.

Problem of Yuan Undervaluation in US-China Trade Relations

2012 ◽  
pp. 20-28
Author(s):  
A. Polivach
Keyword(s):  
Exchange Rate ◽  
National Currency ◽  
Chinese Government ◽  
Scientific Validity ◽  
Trade Relations ◽  
China Trade ◽  
The Us ◽  
World Economic ◽  
Us Dollar ◽  
World Economic Crisis

Before the world economic crisis the Chinese government restricted the sphere of the Yuan’s circulation exceptionally by the domestic market. Basically, until that time the Yuan was not freely convertible while the Chinese foreign trade transactions were operated with the help of the US dollar. This is a sufficient reason to state that the issue of Yuan’s underestimated exchange rate has no fundamental relevance. However, the crisis forced China to substantially extend the utilization of its national currency in the international settlements. This is especially true in case of mutual settlements with the neighbor countries. So far, presumably, the issue of Yuan’s underestimated exchange rate will, at last, receive a scientific validity only when the Chinese national currency will become fully convertible and the scales of its utilization will become comparable with those of the traditional hard currencies.

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