Asian Monetary Unit (AMU) as a Surveillance Indicators for Regional Monetary Cooperation
Journal of International Commerce, Economics and Policy (JICEP), World Scientific, 2011
Posted: 22 Aug 2011
Date Written: June 1, 2011
Ogawa and Shimizu (2005) proposed an Asian Monetary Unit (AMU), which is a common currency basket composed of ASEAN plus three Asian currencies, and AMU Deviation Indicators (AMU DIs), which indicates deviations of each Asian currency in terms of the AMU compared to the benchmark rate. In this paper, we use daily and monthly data of AMU and AMU DIs to examine their usefulness as a surveillance indicator for monetary cooperation in Asia. We find that an AMU peg system stabilizes the trade-weighted exchange rates within Asia and that AMU DIs warn of misalignments of and between Asia currencies.
Keywords: Regional monetary cooperation, common currency basket, Asian Monetary Unit (AMU)
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