Abstract:
With the time varying parameter regression, this paper finds that since the global financial crisis, the East Asian currencies have moved towards basket-peg. Nevertheless, whether there is a convergence among the selection of currency anchors in the baskets remains doubtful. In addition, the dollar still plays a dominant role in the baskets, and renminbi’s influence increases slightly. Opposite to the conventional view, the US dollar’s position weakened mainly before the sub-prime crisis. While the global financial crisis enhances the role of dollar and euro and undermines the role of renminbi and yen. But different from yen, renminbi’s position restored and became even more important after that.
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