publication . Research . 2005

What is the New Chinese Currency Regime?

Shah, Ajay; Zeileis, Achim; Patnaik, Ila;
Open Access English
  • Published: 01 Jan 2005
  • Publisher: Department of Statistics and Mathematics, WU Vienna University of Economics and Business
  • Country: Austria
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,...
Subjects
free text keywords: exchange rates / currency regime / structural change / monitoring
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