| ID | 099908 |
| Title Proper | Retrospect of the Chinese exchange rate regime after reform |
| Other Title Information | stylized facts during the period from 2005 to 2010 |
| Language | ENG |
| Author | Sun, Jie |
| Publication | 2010. |
| Summary / Abstract (Note) | In the present paper, we estimate the de facto RMB exchange rate regime, the currency basket, the floating band and the foreign exchange market pressure before and after the reform of the Chinese exchange rate regime in 2005. We find the following stylized facts: the value of the RMB became stable after the reform; the weight of the US dollar remained high in the basket, while other currencies remained statistically significant; and the floating band gradually increased to 10 percent during 2005-2008, and then greatly narrowed from the late summer of 2008 under the assumption of a yearly resetting interval. We find that the foreign exchange market pressure increased from 2005 to 2008. A possible reason is that the weight of the US dollar in the basket was slightly lower than the share of the US dollar in total transactions on the Chinese foreign exchange market. Therefore, it is reasonable for China to adopt a dollar peg exchange rate regime. |
| `In' analytical Note | China and World Economy Vol. 18, No. 6; Nov-Dec 2010: p.19-35 |
| Journal Source | China and World Economy Vol. 18, No. 6; Nov-Dec 2010: p.19-35 |
| Key Words | Currency Basket ; Exchange Market Pressure ; Floating Band ; RMB Exchange Rate |