Asian Currency Coordination

Writing at the East Asia Forum, Ulrich Volz argues that instead of pressuring China to allow the yuan to appreciate, we should be encouraging a regional approach to East Asian currency exchange rates. The problem with leaning on any one currency with regard to the dollar, but in isolation to the others, is that it threatens the exchange-rate stability upon which the increasingly specialized intra-regional chain of production depends. A coordinated regional approach, by contrast, would stabilize intra-regional networks independently of the dollar, thereby allowing for greater flexibility of the whole vis à vis external markets. In other words, the […]