What is the New Chinese Currency Regime?

Shah, Ajay and Zeileis, Achim and Patnaik, Ila (2005) What is the New Chinese Currency Regime? Research Report Series / Department of Statistics and Mathematics, 23. Department of Statistics and Mathematics, WU Vienna University of Economics and Business, Vienna.

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Abstract

The revaluation of the yuan in July 2005 was described by the Chinese central bank as a change in the currency regime, rather than merely a changed level of the exchange rate. The reform was said to involve a shift away from the fixed exchange rate, a gradual movement towards greater flexibility, and a peg to a basket of currencies. This paper closely examines the post-July Chinese currency regime utilising contemporary ideas in the econometrics of structural change. We find that the yuan has remained pegged to the US dollar, rather than to a basket, and has extremely limited currency flexibility. We find no evidence of structural change in the post-July period, which suggests that there has been no evolution towards greater flexibility. We show a monitoring procedure which will detect future evolution of the currency regime.

Item Type:	Paper
Keywords:	exchange rates / currency regime / structural change / monitoring
Divisions:	Departments > Finance, Accounting and Statistics > Statistics and Mathematics
Depositing User:	Repository Administrator
Date Deposited:	16 Nov 2005 20:02
Last Modified:	22 Oct 2019 00:40
URI:	https://epub.wu.ac.at/id/eprint/1000

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