Is there really a renminbi bloc in Asia?: A modified Frankel–Wei approach

Kawai, Masahiro; Pontines, Victor

doi:10.1016/j.jimonfin.2015.12.003

Cited by 57 publications

(41 citation statements)

References 9 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…7,8 6 Haldane and Hall (1991) analysed sterling during Bank of England management and free floating, while Frankel and Wei (1996) sought to discover weights in an undisclosed official basket. See also Bénassy-Quéré et al (2006), Ito and Kawai (2016), Akiyama (1998, 2000) and Kawai and Pontines (2016). We convert the monthly weights into annual weights as follows.…”

Section: Share Of Usd and Eur In Fx Reserves With And Without Valuatimentioning

confidence: 99%

Currency composition of foreign exchange reserves

Ito

McCauley

2020

Journal of International Money and Finance

View full text Add to dashboard Cite

; invoicing of trade, currency of international debt, foreign exchange reserve management BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS. This publication is available on the BIS website (www.bis.org).

show abstract

Section: Share Of Usd and Eur In Fx Reserves With And Without Valuatimentioning

confidence: 99%

Currency composition of foreign exchange reserves

Ito

McCauley

2020

Journal of International Money and Finance

View full text Add to dashboard Cite

show abstract

“…where

∆ log ((), \frac{E_{i}}{italicCHF})

is the change of the log of the exchange rate ( E ) of country i , vis‐à‐vis the Swiss franc ( CHF ); USD , EUR , JPY and GBP denote the US dollar, the euro, the Japanese yen and the pound sterling. All exchange rates are expressed vis‐à‐vis the Swiss franc, but other currencies may be selected as the numéraire: for instance, Fratzscher and Mehl () choose the SDR, while Kawai and Pontines () prefer the New Zealand dollar.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Most research focuses on determining whether the RMB has begun to appear in the implied currency baskets against which markets, policy-makers or both tend to stabilize the currencies of other Asian economies (e.g. Eichengreen & Lombardi, 2017;Fratzscher & Mehl, 2014;Henning, 2012;Kawai & Pontines, 2016;Subramanian & Kessler, 2013). A common feature of the empirical strategy is to estimate a Frenkel-Wei equation (Frankel & Wei, 1994) of the following type: 1 For an overview of the RMB internationalization process, see Eichengreen and Kawai (2015) and Marconi, Bencivelli, Marra, Schiavone, and Tartaglia-Polcini (2016).…”

Section: Literature Reviewmentioning

confidence: 99%

Currency comovements in Asia‐Pacific: The regional role of the renminbi

Marconi

2018

Pacific Economic Review

View full text Add to dashboard Cite

The internationalization of China's currency, the renminbi (RMB), bolsters the growing economic and political influence of China in the Asia‐Pacific region. This paper assesses the evolution of RMB exchange rate comovements against the US dollar (USD) within the region. While the RMB's influence is growing, it is also found to be asymmetric and varying over time depending on the global movement of the USD. The trend is strong when the USD depreciates but fades when the USD appreciates.

show abstract

“…This could be because of the high weights on the U.S. dollar in Asian currencies' implicit currency baskets. Kawai and Pontines (2016), using rolling regressions of regional exchange rates on major international currencies over the January 2000 -September 2013 period, reported that the weights on the U.S. dollar in Asian currencies' currency baskets remained high. This hinders joint appreciations of Asian currencies against the dollar.…”

Section: Introductionmentioning

confidence: 99%

East Asian value chains, exchange rates, and regional exchange rate arrangements

Thorbecke

2019

Journal of Asian Economics

View full text Add to dashboard Cite

Tariffs and trade wars threaten East Asian economies. Exchange rate appreciations would be less disruptive than protectionism. This paper reports dynamic ordinary least squares findings indicating that appreciations in Asian supply chain countries reduce exports and increase imports. However, despite large current account surpluses, there has been little exchange rate appreciation outside of China. Modified Frankel-Wei (1994) regressions indicate that Asian countries focus on the U.S. dollar in their implicit currency baskets. These high weights on the dollar imply that regional exchange rates are in a Nash Equilibrium. No Asian country wants its exchange rate to appreciate against the dollar for fear of losing price competitiveness relative to its neighbors. A better equilibrium would occur if they assigned more weight to regional currencies and less to the dollar. This would facilitate a concerted appreciation of Asian currencies against the dollar.

show abstract

Is there really a renminbi bloc in Asia?: A modified Frankel–Wei approach

Cited by 57 publications

References 9 publications

Currency composition of foreign exchange reserves

Currency composition of foreign exchange reserves

Currency comovements in Asia‐Pacific: The regional role of the renminbi

East Asian value chains, exchange rates, and regional exchange rate arrangements

Contact Info

Product

Resources

About