Evolution of Exchange Rate Behavior in the ASEAN-5 Countries

August 8, 2016

Preview Citation

Format: Chicago

Vladimir Klyuev, and To-Nhu Dao. Evolution of Exchange Rate Behavior in the ASEAN-5 Countries, (USA: International Monetary Fund, 2016) accessed November 8, 2024

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.

Subject: Currencies, Exchange rate adjustments, Exchange rate analysis, Exchange rate policy, Exchange rates, Foreign exchange, Money

Keywords: ASEAN, British pound, Chinese renminbi, Currencies, Currency blocks, Currency movement, Exchange rate adjustments, Exchange rate analysis, Exchange rate policy, Exchange rate regimes, Exchange rate volatility, Exchange rates, Fear of floating, Global, Malaysian ringgit, Reference currency, U.S. dollar, U.S. dollar peg, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2016/165
Stock No:

WPIEA2016165
ISBN:

9781475523867
ISSN:

1018-5941

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