The fog encircling the renminbi debate
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal
|Journal / Publication||Singapore Economic Review|
|Publication status||Published - Dec 2007|
|Link to Scopus||https://www.scopus.com/record/display.uri?eid=2-s2.0-37249056424&origin=recordpage|
We assess some recently advanced arguments for the claim that the RMB is undervalued. These arguments are those based on the direct valuation of the RMB, trade imbalances, the accumulation of foreign exchange reserves, and the degree of policy dependence. The extant evidence does not support a strong verdict regarding RMB undervaluation that meets the statistical standards of academic empirical studies. One interpretation is that the evaluation of the equilibrium RMB exchange rate is far more complicated than it appears. Another view is that the data are insufficiently informative. Some related policy concerns are also discussed. © World Scientific Publishing Company.
- Exchange rate uncertainty, International reserves, Policy dependence, Trade surplus