Exchange rate management in selected East Asian countries after the financial crisis

his article examined post-crisis exchange rate management in selected East Asian countries in terms of exchange rate regimes and targeting. The main findings from our empirical studies are as follows: As far as can be seen from the recent developments of exchange rate arrangements in countries analyzed according to the IMF classification, it appears that the hypothesis of the corner solution with a “hard peg” or “free float” has taken hold in the post-crisis period. However, when we analyze the de facto regimes by examining the volatilities of foreign exchange reserves, we can speculate that the countries analyzed, except for Malaysia, are in fact holding to the “soft peg” even in the post-crisis period, regardless of their announcement in favor of the “free float”. The next issue to consider is what kind of factors determine the targeted reference rate. Post-crisis exchange rate targeting appears to be somewhat different from the simple US dollar standard in the pre-crisis period. Empirical evidence shows that some countries have come to value inflation adjustment in exchange rate targeting in addition to the US dollar linkage during the post-crisis period.