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 |
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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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