Resource title

What is the New Chinese Currency Regime?

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Resource description

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. (author's abstract) ; Series: Research Report Series / Department of Statistics and Mathematics

Resource author

Ajay Shah, Achim Zeileis, Ila Patnaik

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Resource language

en

Resource content type

application/pdf

Resource resource URL

http://epub.wu.ac.at/1000/1/document.pdf

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