Determining the RMB Exchange Regime
Posted: 3 May 2010
Date Written: May 2, 2010
Abstract
Although China has claimed since 2005 that it will move towards a more market-oriented system of managing its foreign exchange, it has remained in part a managed economic system. This article examines the relative importance of market force and currency arrangements in determining the RMB exchange regime using both traditional linear and nonlinear artificial intelligence models. We find that the emphasis on the US Dollar as a reference currency has declined. Fundamentalist forces are strong determinants of the currency exchange.
Keywords: China Currency, Basket Regime, Market Forces, Exchange Arrangements, Artificial Neural Network
JEL Classification: E42, D83, D87
Suggested Citation: Suggested Citation