Adjustments of Capital Account Restrictions and Exchange Rate Regimes in East Asia

29 Pages Posted: 4 Apr 2015

See all articles by Naoyuki Yoshino

Naoyuki Yoshino

Asian Development Bank Institute

Sahoko Kaji

Keio University

Tamon Asonuma

International Monetary Fund Research Department

Multiple version iconThere are 2 versions of this paper

Date Written: April 3, 2015

Abstract

This paper discusses adjustments of capital account restrictions and exchange rate regimes in East Asia. Monetary authorities have two options for these adjustments: gradual adjustments or rapid adjustments. We analyze the costs and benefits for both adjustment options in each area, i.e., capital account restrictions and exchange rate regime. The paper provides prominent country cases for each adjustment option to emphasize the benefits for policymakers. We then propose four transition policy options for East Asian countries aiming to relax capital account restrictions and increase flexibility in exchange rates from fixed regimes with capital account controls.

Keywords: exchange rate transition, East Asia, capital account controls, exchange rate transition policies

JEL Classification: F33, F41, F42

Suggested Citation

Yoshino, Naoyuki and Kaji, Sahoko and Asonuma, Tamon, Adjustments of Capital Account Restrictions and Exchange Rate Regimes in East Asia (April 3, 2015). ADBI Working Paper 518. Available at SSRN: https://ssrn.com/abstract=2589433 or http://dx.doi.org/10.2139/ssrn.2589433

Naoyuki Yoshino (Contact Author)

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

Sahoko Kaji

Keio University ( email )

2-15-45 Mita
Minato-ku
Tokyo, 108-8345
Japan

Tamon Asonuma

International Monetary Fund Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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