Evolution of Exchange Rate Behavior in the ASEAN-5 Countries

Author/Editor:

Vladimir Klyuev ; To-Nhu Dao

Publication Date:

August 8, 2016

Electronic Access:

Download PDF. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines exchange rate behavior in the ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand). It finds that for the last 10 years there is no evidence that their central banks target particular exchange rate levels against any currency or basket. Thus, contrary to some assertions, they do not belong to a U.S. dollar club, a Japanese yen club, a Chinese renminbi club, or an ASEAN club. At the same time, they clearly try to smooth short-term volatility, particularly vis-à-vis the U.S. dollar. The degree of smoothing declined noticeably after the Asian Financial Crisis and less obviously after the Global Financial Crisis, with heterogeneity across countries. Short-term smoothing without level targeting does not interfere with monetary policies aimed at price stability.

Series:

Working Paper No. 16/165

Subject:

English

Publication Date:

August 8, 2016

ISBN/ISSN:

9781475523867/1018-5941

Stock No:

WPIEA2016165

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

34

Please address any questions about this title to publications@imf.org