Does China Need a More Flexible Exchange Rate? - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Does China Need a More Flexible Exchange Rate? write by Teng T. Xu. This book was released on 2010. Does China Need a More Flexible Exchange Rate? available in PDF, EPUB and Kindle. "During the past few years, there has been heated debate - both domestically and internationally - about China’s exchange rate policy. At the heart of the debate are two fundamental issues: First, is the renminbi undervalued? If so, by how much; and second, toward what exchange rate regime should China move? This paper sheds light on the first issue by examining the "equilibrium" value of the renminbi and its alleged undervaluation, but focuses on the second issue - in particular, the risks to financial stability and the domestic costs of China’s current exchange rate regime. By reviewing a large number of Chinese and western literatures on a series of specific issues pertaining to China’s exchange rate policy such as: the revolution of the renminbi exchange rate regime since the start of the economic reforms 30 plus year ago; the "equilibrium" value of the renminbi and its alleged undervaluation; China’s fast growing current account surplus in recent years and its contribution factors; the risks to financial stability and other domestic costs of China’s current rigid exchange rate regime, this paper finds that the latest debates on the renminbi exchange rate regime in China mirror those in the west. In other words, there are same rival camps both inside and outside China. The synthesis of their findings is that greater exchange rate flexibility can resolve many of the challenges and obstacles posed by China’s current tightly managed exchange rate regime."--P. ii.
China’s Evolving Exchange Rate Regime
China’s Evolving Exchange Rate Regime - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook China’s Evolving Exchange Rate Regime write by Mr.Sonali Das. This book was released on 2019-03-07. China’s Evolving Exchange Rate Regime available in PDF, EPUB and Kindle. China’s exchange rate regime has undergone gradual reform since the move away from a fixed exchange rate in 2005. The renminbi has become more flexible over time but is still carefully managed, and depth and liquidity in the onshore FX market is relatively low compared to other countries with de jure floating currencies. Allowing a greater role for market forces within the existing regime, and greater two-way flexibility of the exchange rate, are important steps to build on the progress already made. This should be complemented by further steps to develop the FX market, improve FX risk management, and modernize the monetary policy framework.
China’s Evolving Exchange Rate Regime
China’s Evolving Exchange Rate Regime - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook China’s Evolving Exchange Rate Regime write by Mr.Sonali Das. This book was released on 2019-03-07. China’s Evolving Exchange Rate Regime available in PDF, EPUB and Kindle. China’s exchange rate regime has undergone gradual reform since the move away from a fixed exchange rate in 2005. The renminbi has become more flexible over time but is still carefully managed, and depth and liquidity in the onshore FX market is relatively low compared to other countries with de jure floating currencies. Allowing a greater role for market forces within the existing regime, and greater two-way flexibility of the exchange rate, are important steps to build on the progress already made. This should be complemented by further steps to develop the FX market, improve FX risk management, and modernize the monetary policy framework.
Putting the Cart Before the Horse? Capital Account Liberalization and Exchange Rate Flexibility in China
Putting the Cart Before the Horse? Capital Account Liberalization and Exchange Rate Flexibility in China - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Putting the Cart Before the Horse? Capital Account Liberalization and Exchange Rate Flexibility in China write by Mr.Eswar Prasad. This book was released on 2005-01-01. Putting the Cart Before the Horse? Capital Account Liberalization and Exchange Rate Flexibility in China available in PDF, EPUB and Kindle. This paper reviews the issues involved in moving towards greater exchange rate flexibility and capital account liberalization in China. A more flexible exchange rate regime would allow China to operate a more independent monetary policy, providing a useful buffer against domestic and external shocks. At the same time, weaknesses in China’s financial system suggest that capital account liberalization poses significant risks and should be a lower priority in the short term. This paper concludes that greater exchange rate flexibility is in China’s own interest and that, along with a more stable and robust financial system, it should be regarded as a prerequisite for undertaking a substantial liberalization of the capital account.
On the Renminbi
On the Renminbi - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook On the Renminbi write by Jeffrey Frankel. This book was released on 2005. On the Renminbi available in PDF, EPUB and Kindle. Fixed and flexible exchange rates each have advantages, and a country has the right to choose the regime suited to its circumstances. Nevertheless, several arguments support the view that the de facto dollar peg may now have outlived its usefulness for China. (1) China's economy is on the overheating side of internal balance, and appreciation would help easy inflationary pressure. (2) Although foreign exchange reserves are a useful shield against currency crises, by now China's current level is fully adequate, and US treasury securities do not pay a high return. (3) It becomes increasingly difficult to sterilize the inflow over time, exacerbating inflation. (4) Although external balance could be achieved by expenditure reduction, e.g., by raising interest rates, the existence of two policy goals (external balance and internal balance) in general requires the use of two independent policy instruments (e.g., the real exchange rate and the interest rate). (5) A large economy like China can achieve adjustment in the real exchange rate via flexibility in the nominal exchange rate more easily than via price flexibility. (6) The experience of other emerging markets points toward exiting from a peg when times are good and the currency is strong, rather than waiting until times are bad and the currency is under attack. (7) From a longer-run perspective, prices of goods and services in China are low -- not just low relative to the United States (.23), but also low by the standards of a Balassa-Samuelson relationship estimated across countries (which predicts .36). In this specific sense, the yuan was undervalued by approximately 35% in 2000, and is by at least as much today. The paper finds that, typically across countries, such gaps are corrected halfway, on average, over the subsequent decade. These seven arguments for increased exchange rate flexibility need not imply a free float. China is a good counter-example to the popular "corners hypothesis" prohibition on intermediate exchange rate regimes.
