Plausibility of Local Currency Contribution to the CMIM

• 발행기관: 서울대학교 경제연구소
• 저자명: Soyoung Kim Woongji Im
• 간행물 정보: 『Seoul Journal of Economics』Seoul Journal of Economics Volume 33 No.3, 437~479쪽, 전체 43쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.08.30

영문 초록

This study assesses the plausibility of local currency contribution to the Chiang Mai Initiative Multilateralization (CMIM) arrangement. First, we investigate the (net) demand for local currencies in foreign exchange reserves because introducing local currency contribution is efficient only when sufficient demand exists. The main results are as follows. i) Substantial demand exists for local currencies in foreign exchange reserves. ii) The size of the demand for local currencies in foreign exchange reserves is large in comparison with the size of the maximum withdrawal from CMIM. iii) Net demand for local currencies in CMIM tends to be positive. Second, the stability of local currencies is analyzed by calculating the exchange market pressure index because costs of local currency contribution to CMIM arrangements can be high if local currencies are unstable. The results suggest that several currencies of ASEAN+3 members are as stable as popular non-U.S. international currencies for various sub-periods. The results in terms of stability of the currency, internationalization of currency, and liberalization of capital account transactions, indicate that the Japanese yen, Chinese yuan, and Korean won could first be considered eligible for local currency contribution to CMIM arrangements. Overall, the results may support the idea of introducing local currency contribution to CMIM arrangements.

목차

I. Introduction

II. Benefits and Costs of Local Currency Contribution to CMIM Arrangements

III. Demand for Local Currencies in Foreign Exchange Reserves and CMIM

IV. Stability of Local Currencies

V. Concluding Remarks

References

키워드

Local currency contribution CMIM Demand for local currencies Stability of currency Exchange market pressure index ASEAN+3 Foreign exchange reserves