The Bank of China Reports on Monetary Reform

Purpose – For over a 100 years, Macau’s Pataca has been tied to Macau’s identity, its independent financial existence and its links to the Lusophone world. Its role as a supporter of the Macau identity relies upon the strength and capabilities of its financial institutions, the Macau Monetary Authority and banking institutions that issue its currency (Banco Nacional Ultramarino and Bank of China). The paper aims to discuss the above issue. Design/methodology/approach – The author uses statistics and data from the Macau Monetary Authority. Findings – There are three possible scenarios that could emerge: first, retired in favor of the RMB, the HK dollar; second, maintained with its use expanding as Macau’s revenues and investment funds grow, or third, become a force for stronger economic cohesion and identity among the Lusophone nations. Practical implications – Which of these scenarios will offer Macau the highest possibility of maintaining its international network of relationships and representation, diversifying its economy into new growth markets and playing a unique role in China’s twenty-first century destiny? Originality/value – This paper studies a rarely discussed topic and focuses on a core component of Macau’s existence.

Download Full-text

Monetary and Exchange Rate Policies for International Financial Stability: A Proposal

The Journal of Economic Perspectives ◽

10.1257/jep.2.1.83 ◽

1988 ◽

Vol 2 (1) ◽

pp. 83-103 ◽

Cited By ~ 79

Author(s):

Ronald I McKinnon

Keyword(s):

Exchange Rate ◽

Exchange Rates ◽

Foreign Exchange ◽

Purchasing Power Parity ◽

Financial Stability ◽

Foreign Exchange Market ◽

The United States ◽

Power Parity ◽

Monetary Reform ◽

Exchange Rate Fluctuations

What keeps the three major industrial blocs -- Western Europe, North America, and industrialized Asia -- from developing a common monetary standard to prevent exchange-rate fluctuations? One important reason is the differing theoretical perspectives of economic advisers. The first issue is whether or not a floating foreign exchange market -- where governments do not systematically target exchange rates -- is “efficient.” Many economists believe that exchange risk can be effectively hedged in forward markets so international monetary reform is unnecessary. Second, after a decade and a half of unremitting turbulence in the foreign exchange markets, economists cannot agree on “equilibrium” or desirable official targets for exchange rates if they were to be stabilized. The contending principles of purchasing power parity and of balanced trade yield very different estimates for the “correct” yen/dollar and mark/dollar exchange rates. Third, if the three major blocs can agree to fix nominal exchange rates within narrow bands, by what working rule should the new monetary standard be anchored to prevent worldwide inflation or deflation? After considering the magnitude of exchange-rate fluctuations since floating began in the early 1970s, I analyze these conceptual issues in the course of demonstrating how the central banks of Japan, the United States, and Germany (representing the continental European bloc) can establish fixed exchange rates and international monetary stability.

Download Full-text

Taiwanese Mutual Fund Performance Under Different Central Bank of China Monetary Policy Environments

Emerging Markets Finance and Trade ◽

10.2753/ree1540-496x440206 ◽

2008 ◽

Vol 44 (2) ◽

pp. 100-116 ◽

Cited By ~ 3

Author(s):

Ming-Hsiang Chen ◽

Su-Jane Chen ◽

Chao-Ning Liao ◽

Chun-Ming Lin

Keyword(s):

Monetary Policy ◽

Central Bank ◽

Mutual Fund ◽

Fund Performance ◽

Mutual Fund Performance ◽

Bank Of China ◽

Policy Environments

Download Full-text