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Unification Of China'S Foreign Exchange Rates

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  • GUOBO HUANG
  • CLEMENT YUK‐PANG WONG

Abstract

This paper studies China's foreign exchange market before and after the 1994 unification of the official and swap exchange rates. Examining segmentation as well as linkages among the foreign exchange adjustment centers (FEACs) reveals that the linkages were not strong enough to eliminate or narrow price differentials among FEACs. Hence, improving the foreign exchange market's efficiency requires a reform to unify the swap rates. This paper discusses the unification's implications for inflation, monetary policy, and current account convertibility.

Suggested Citation

  • Guobo Huang & Clement Yuk‐Pang Wong, 1996. "Unification Of China'S Foreign Exchange Rates," Contemporary Economic Policy, Western Economic Association International, vol. 14(4), pages 42-57, October.
    • Handle: RePEc:bla:coecpo:v:14:y:1996:i:4:p:42-57
    DOI: 10.1111/j.1465-7287.1996.tb00632.x
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    References listed on IDEAS

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    1. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    2. Mr. Joshua E. Greene & Mr. Peter Isard, 1991. "Currency Convertibility and the Transformation of Centrally Planned Economies," IMF Occasional Papers 1991/004, International Monetary Fund.
    3. Pinto, Brian, 1991. "Black markets for foreign exchange, real exchange rates and inflation," Journal of International Economics, Elsevier, vol. 30(1-2), pages 121-135, February.
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    Cited by:

    1. Chan, Kam C. & Fung, Hung-Gay & Thapa, Samanta, 2007. "China financial research: A review and synthesis," International Review of Economics & Finance, Elsevier, vol. 16(3), pages 416-428.

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