6533b83afe1ef96bd12a788f

RESEARCH PRODUCT

Determining the RMB Exchange Regime

Ilan AlonIlan AlonIlan AlonXiaobing Feng

subject

Foreign exchange swapCurrencyReserve currencyRenminbiDevaluationBusinessInternational economicsMonetary economicsForeign exchange riskChinaForeign exchange market

description

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 chapter examines the relative importance of fundamentalist, chartist and currency arrangements in determining the RMB exchange regime using both traditional linear and non-linear artificial intelligence models. We find that the emphasis on the US dollar as a reference currency has declined. Fundamentalist forces are becoming strong determinants of the currency exchange. The genetic programming approach is among the best performing in minimizing forecasting error.

yearjournalcountryeditionlanguage
2011-01-01
https://doi.org/10.1108/s1569-3759(2011)0000093022