Staff Papers
Published Date: 01 February 2000

Exchange Rate Policy in East Asia After The Fall: How Much Have Things Changed?

MAS Occasional Paper No. 19 February 2000 - By Financial & Special Studies Division, Economics Department

Executive Summary

1       While much have been written on the relationship between the exchange rate regimes and the out break of the currency crises in East Asia, there is comparatively little literature on the conduct of the post-crisis exchange rate policies in the region. The paper analyses the following aspects of the post-crisis exchange rate regime:

(i)    the shift in the relative weights accorded to the US Dollar and the Yen under the more flexible exchange rate regime;

(ii)   the macroeconomic sources of exchange rate variability;

(iii)   the process of regaining exchange rate credibility and exchange market stability; and

(iv)   the reversion of the exchange rates back to their fundamental values.