Renminbi and East Asia: Synergy to Decrease Dollar Dependency

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Chinese Renminbihas been included in IMF Special Drawing Right since the end of 2015. This momentum notified the increasing importance of Renminbi as a rising star of international currency.East Asia, especially ASEAN plus 3 has responded to renminbi internationalization and Asian Financial crisis by Chiang Mai InitiativeMultilateralization. The Fed Quantitative Easing (QE) has benefiting as well as hurting many emerging countries. Exchange rate stability of emerging East Asia has been influenced by QE policy. QE policy and Renminbi Internationalization is the nexus that will be analyzed. This paper will make an exploration on the impact of Renminbi internationalization together with QE policy in advanced economy to exchange rate stability of East Asian countries. Could Renminibi internationalization help East Asian countries to decrease the dollar dependency? This research would give empirical evidence that Renminbi has already become important force impacting the exchange rate of East Asian currencies. The framework of empirical model from Frankel and Wei (1994), as well as Ogawa and Shimizu (2006)would be used to answer the question. Finally, policy implications for monetary authority and government in East Asia countries as well as for monetary cooperation in East Asia will be discussed.
Original languageEnglish
Title of host publicationThe 15th International Convention ofthe East Asian Economic Association in Cooperation with University of Padjadjaran
PublisherFEB Universitas Padjadjaran
Pages1-24
Number of pages24
ISBN (Electronic)2540-928X
ISBN (Print)9772540928014
Publication statusPublished - 2016

Keywords

  • Exchange Rate
  • Renminbi
  • International Currency

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