Transmitting Global Liquidity to East Asia: Policy Rates, Bond Yields, Currencies and Dollar Credit

HKIMR Working Paper No.15/2013

47 Pages Posted: 28 Oct 2013

See all articles by Dong He

Dong He

Hong Kong Monetary Authority; Hong Kong Institute for Monetary Research (HKIMR)

Robert N. McCauley

Bank for International Settlements (BIS)

Multiple version iconThere are 2 versions of this paper

Date Written: October 28, 2013

Abstract

We review extant work on the transmission of monetary policy, both conventional and unconventional, of the major advanced economies to East Asia through monetary policy reactions, integrated bond markets and induced currency appreciation. We present new results on the growth of foreign currency credit, especially US dollar credit, as a transmission mechanism. Restrained growth of dollar credit in Korea contrasts with very rapid growth on the Chinese mainland and in Hong Kong SAR.

Suggested Citation

He, Dong and McCauley, Robert N., Transmitting Global Liquidity to East Asia: Policy Rates, Bond Yields, Currencies and Dollar Credit (October 28, 2013). HKIMR Working Paper No.15/2013. Available at SSRN: https://ssrn.com/abstract=2346179 or http://dx.doi.org/10.2139/ssrn.2346179

Dong He (Contact Author)

Hong Kong Monetary Authority

3 Garden Road, 30th Floor
Hong Kong
Hong Kong

Hong Kong Institute for Monetary Research (HKIMR)

3 Garden Road, 8th Floor
Hong Kong
China

Robert N. McCauley

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

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