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UNIFICATION OF CHINA'S FOREIGN EXCHANGE RATES
Author(s) -
HUANG GUOBO,
WONG CLEMENT YUKPANG
Publication year - 1996
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1996.tb00632.x
Subject(s) - convertibility , unification , swap (finance) , economics , foreign exchange swap , exchange rate , foreign exchange market , international economics , china , foreign exchange , monetary economics , monetary policy , interest rate parity , interest rate swap , currency , finance , political science , computer science , programming language , law
This paper studies China's foreign exchange market before and after the 1994 unification of the official and swap exchange rates. Examining segmentation as well as linkages among the foreign exchange adjustment centers (FEACs) reveals that the linkages were not strong enough to eliminate or narrow price differentials among FEACs. Hence, improving the foreign exchange market's efficiency requires a reform to unify the swap rates. This paper discusses the unification's implications for inflation, monetary policy, and current account convertibility.