Implications of the Currency Crisis for Exchange Rate Arrangements in Emerging East Asia
The authors examine the implications of the East Asian currency crisis for exchange rate arrangements in the region's emerging market economies. They focus on the roles of the U.S. dollar, the Japanese yen, and the euro in the emerging East As...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/12/748691/implications-currency-crisis-exchange-rate-arrangements-emerging-east-asia http://hdl.handle.net/10986/19752 |
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okr-10986-197522021-04-23T14:03:44Z Implications of the Currency Crisis for Exchange Rate Arrangements in Emerging East Asia Kawai, Masahiro Akiyama, Shigeru BILATERAL TRADE CAPITAL CONTROLS CAPITAL FLOW REVERSALS CAPITAL FLOWS CAPITAL OUTFLOWS CENTRAL BANK COMMON CURRENCY COMPETITIVENESS CRAWLING PEGS CREDITOR CURRENCY CURRENCY AREAS CURRENCY BASKET CURRENCY BASKETS CURRENCY BOARD CURRENCY DEVALUATIONS CURRENCY PEGS DEREGULATION DEUTSCHE MARK DEVALUATION DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DOMESTIC PRICE EMERGING ECONOMIES EURO EXCHANGE EXCHANGE MARKET DEVELOPMENTS EXCHANGE MARKET STABILITY EXCHANGE RATE EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE FLEXIBILITY EXCHANGE RATE MANAGEMENT EXCHANGE RATE POLICIES EXCHANGE RATE POLICY EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXCHANGE RATE STABILITY EXCHANGE RATES EXPORTS EXTERNAL DEBT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEM FIXED FIXED FIXED EXCHANGE FIXED EXCHANGE RATE FIXED RATE FOREIGN EXCHANGE FOREIGN EXCHANGE CONTRACTS FOREIGN EXCHANGE MARKET FOREIGN EXCHANGE MARKETS FOREIGN EXCHANGE RESERVES FOREIGN INVESTORS FREE TRADE FUTURE RESEARCH GEOGRAPHICAL LOCATION GOVERNMENT DEBT HIGH INFLATION HIGH VOLATILITY HONG KONG MONETARY AUTHORITY IMPORTANT COMPONENT IMPORTANT ROLE INDUSTRIALIZED COUNTRIES INFLATION RATE INFLATION RATES INTEREST RATE INTEREST RATES INTERNATIONAL FINANCE INTERNATIONAL MONETARY FUND JAPANESE YEN LARGE VOLUME LEGAL TENDER LIQUIDITY MALAYSIAN RINGGIT MARKET DEVELOPMENT MARKET ECONOMIES MARKET ECONOMY MARKET FORCES MEMBER COUNTRIES MONETARY ARRANGEMENTS MONETARY AUTHORITIES NEW ZEALAND DOLLAR NOMINAL ANCHOR NUMERAIRE POLICY RESEARCH PRICE DECLINES REGRESSION ANALYSES REGRESSION ANALYSIS RUSSIAN RUBLE SOUTH AFRICAN RAND SPECIAL DRAWING RIGHTS STABILIZATION STABILIZATION POLICY STOCK PRICES THAI BAHT VOLATILITY The authors examine the implications of the East Asian currency crisis for exchange rate arrangements in the region's emerging market economies. They focus on the roles of the U.S. dollar, the Japanese yen, and the euro in the emerging East Asian economies' exchange rate policies. They claim that these economies are particularly susceptible to large exchange rate fluctuations because they have been pursuing financial deregulation, opening markets, and liberalizing capital accounts, and because they face increased risk of sudden capital flow reversals, with attendant instability in their financial system and foreign exchange market. The authors find that the dollar's role as the dominant anchor currency in East Asia was reduced during the recent currency crisis but has become prominent again since late 1998. It is too early for conclusions, but the economies seem likely to maintain more flexible exchange rate arrangements, at least officially. At the same time, these economies presumably will continue to prefer to maintain exchange rate stability without fixed rate commitments. They are better off choosing a balanced currency basket system in which the yen and the euro play a more important role than before. The ASEAN countries have a special incentive to avoid harmful fluctuations in exchange rates within the region, which could suddenly alter their international price competitiveness and make prospective free trade agreements unsuitable. So they may stabilize their exchange rates against similar currency baskets, to ensure intraregional exchange rate stability. 2014-08-27T16:54:14Z 2014-08-27T16:54:14Z 2000-12 http://documents.worldbank.org/curated/en/2000/12/748691/implications-currency-crisis-exchange-rate-arrangements-emerging-east-asia http://hdl.handle.net/10986/19752 English en_US Policy Research Working Paper;No. 2502 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific East Asia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BILATERAL TRADE CAPITAL CONTROLS CAPITAL FLOW REVERSALS CAPITAL FLOWS CAPITAL OUTFLOWS CENTRAL BANK COMMON CURRENCY COMPETITIVENESS CRAWLING PEGS CREDITOR CURRENCY CURRENCY AREAS CURRENCY BASKET CURRENCY BASKETS CURRENCY BOARD CURRENCY DEVALUATIONS CURRENCY PEGS DEREGULATION DEUTSCHE MARK DEVALUATION DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DOMESTIC PRICE EMERGING ECONOMIES EURO EXCHANGE EXCHANGE MARKET DEVELOPMENTS EXCHANGE MARKET STABILITY EXCHANGE RATE EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE FLEXIBILITY EXCHANGE RATE MANAGEMENT EXCHANGE RATE POLICIES EXCHANGE RATE POLICY EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXCHANGE RATE STABILITY EXCHANGE RATES EXPORTS EXTERNAL DEBT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEM FIXED FIXED FIXED EXCHANGE FIXED EXCHANGE RATE FIXED RATE FOREIGN EXCHANGE FOREIGN EXCHANGE CONTRACTS FOREIGN EXCHANGE MARKET FOREIGN EXCHANGE MARKETS FOREIGN EXCHANGE RESERVES FOREIGN INVESTORS FREE TRADE FUTURE RESEARCH GEOGRAPHICAL LOCATION GOVERNMENT DEBT HIGH INFLATION HIGH VOLATILITY HONG KONG MONETARY AUTHORITY IMPORTANT COMPONENT IMPORTANT ROLE INDUSTRIALIZED COUNTRIES INFLATION RATE INFLATION RATES INTEREST RATE INTEREST RATES INTERNATIONAL FINANCE INTERNATIONAL MONETARY FUND JAPANESE YEN LARGE VOLUME LEGAL TENDER LIQUIDITY MALAYSIAN RINGGIT MARKET DEVELOPMENT MARKET ECONOMIES MARKET ECONOMY MARKET FORCES MEMBER COUNTRIES MONETARY ARRANGEMENTS MONETARY AUTHORITIES NEW ZEALAND DOLLAR NOMINAL ANCHOR NUMERAIRE POLICY RESEARCH PRICE DECLINES REGRESSION ANALYSES REGRESSION ANALYSIS RUSSIAN RUBLE SOUTH AFRICAN RAND SPECIAL DRAWING RIGHTS STABILIZATION STABILIZATION POLICY STOCK PRICES THAI BAHT VOLATILITY |
| spellingShingle |
BILATERAL TRADE CAPITAL CONTROLS CAPITAL FLOW REVERSALS CAPITAL FLOWS CAPITAL OUTFLOWS CENTRAL BANK COMMON CURRENCY COMPETITIVENESS CRAWLING PEGS CREDITOR CURRENCY CURRENCY AREAS CURRENCY BASKET CURRENCY BASKETS CURRENCY BOARD CURRENCY DEVALUATIONS CURRENCY PEGS DEREGULATION DEUTSCHE MARK DEVALUATION DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DOMESTIC PRICE EMERGING ECONOMIES EURO EXCHANGE EXCHANGE MARKET DEVELOPMENTS EXCHANGE MARKET STABILITY EXCHANGE RATE EXCHANGE RATE EXCHANGE RATE ARRANGEMENTS EXCHANGE RATE FLEXIBILITY EXCHANGE RATE MANAGEMENT EXCHANGE RATE POLICIES EXCHANGE RATE POLICY EXCHANGE RATE REGIME EXCHANGE RATE REGIMES EXCHANGE RATE STABILITY EXCHANGE RATES EXPORTS EXTERNAL DEBT FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEM FIXED FIXED FIXED EXCHANGE FIXED EXCHANGE RATE FIXED RATE FOREIGN EXCHANGE FOREIGN EXCHANGE CONTRACTS FOREIGN EXCHANGE MARKET FOREIGN EXCHANGE MARKETS FOREIGN EXCHANGE RESERVES FOREIGN INVESTORS FREE TRADE FUTURE RESEARCH GEOGRAPHICAL LOCATION GOVERNMENT DEBT HIGH INFLATION HIGH VOLATILITY HONG KONG MONETARY AUTHORITY IMPORTANT COMPONENT IMPORTANT ROLE INDUSTRIALIZED COUNTRIES INFLATION RATE INFLATION RATES INTEREST RATE INTEREST RATES INTERNATIONAL FINANCE INTERNATIONAL MONETARY FUND JAPANESE YEN LARGE VOLUME LEGAL TENDER LIQUIDITY MALAYSIAN RINGGIT MARKET DEVELOPMENT MARKET ECONOMIES MARKET ECONOMY MARKET FORCES MEMBER COUNTRIES MONETARY ARRANGEMENTS MONETARY AUTHORITIES NEW ZEALAND DOLLAR NOMINAL ANCHOR NUMERAIRE POLICY RESEARCH PRICE DECLINES REGRESSION ANALYSES REGRESSION ANALYSIS RUSSIAN RUBLE SOUTH AFRICAN RAND SPECIAL DRAWING RIGHTS STABILIZATION STABILIZATION POLICY STOCK PRICES THAI BAHT VOLATILITY Kawai, Masahiro Akiyama, Shigeru Implications of the Currency Crisis for Exchange Rate Arrangements in Emerging East Asia |
| geographic_facet |
East Asia and Pacific East Asia |
| relation |
Policy Research Working Paper;No. 2502 |
| description |
The authors examine the implications of
the East Asian currency crisis for exchange rate
arrangements in the region's emerging market economies.
They focus on the roles of the U.S. dollar, the Japanese
yen, and the euro in the emerging East Asian economies'
exchange rate policies. They claim that these economies are
particularly susceptible to large exchange rate fluctuations
because they have been pursuing financial deregulation,
opening markets, and liberalizing capital accounts, and
because they face increased risk of sudden capital flow
reversals, with attendant instability in their financial
system and foreign exchange market. The authors find that
the dollar's role as the dominant anchor currency in
East Asia was reduced during the recent currency crisis but
has become prominent again since late 1998. It is too early
for conclusions, but the economies seem likely to maintain
more flexible exchange rate arrangements, at least
officially. At the same time, these economies presumably
will continue to prefer to maintain exchange rate stability
without fixed rate commitments. They are better off choosing
a balanced currency basket system in which the yen and the
euro play a more important role than before. The ASEAN
countries have a special incentive to avoid harmful
fluctuations in exchange rates within the region, which
could suddenly alter their international price
competitiveness and make prospective free trade agreements
unsuitable. So they may stabilize their exchange rates
against similar currency baskets, to ensure intraregional
exchange rate stability. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Kawai, Masahiro Akiyama, Shigeru |
| author_facet |
Kawai, Masahiro Akiyama, Shigeru |
| author_sort |
Kawai, Masahiro |
| title |
Implications of the Currency Crisis for Exchange Rate Arrangements in Emerging East Asia |
| title_short |
Implications of the Currency Crisis for Exchange Rate Arrangements in Emerging East Asia |
| title_full |
Implications of the Currency Crisis for Exchange Rate Arrangements in Emerging East Asia |
| title_fullStr |
Implications of the Currency Crisis for Exchange Rate Arrangements in Emerging East Asia |
| title_full_unstemmed |
Implications of the Currency Crisis for Exchange Rate Arrangements in Emerging East Asia |
| title_sort |
implications of the currency crisis for exchange rate arrangements in emerging east asia |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/12/748691/implications-currency-crisis-exchange-rate-arrangements-emerging-east-asia http://hdl.handle.net/10986/19752 |
| _version_ |
1764440545119174656 |