{ "id": "RS22860", "type": "CRS Report", "typeId": "REPORTS", "number": "RS22860", "active": true, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 461579, "date": "2017-05-26", "retrieved": "2018-05-10T13:21:19.886101", "title": "East Asia\u2019s Foreign Exchange Rate Policies", "summary": "According to the International Monetary Fund (IMF), monetary authorities in East Asia (including Southeast Asia) have adopted a variety of foreign exchange rate policies, varying from Hong Kong\u2019s currency board system which links the Hong Kong dollar to the U.S. dollar, to the \u201cindependently floating\u201d exchange rates of Japan, the Philippines, and South Korea. Most Asian monetary authorities have adopted \u201cmanaged floats\u201d that allow their currency to fluctuate within a limited range over time as part of a larger economic policy. Regardless of their exchange rate policies, monetary authorities on occasion may intervene in foreign exchange (forex) markets in an effort to dampen destabilizing fluctuations in the value of their currencies. \nLegislation has been introduced during past Congresses designed to pressure nations seen as \u201ccurrency manipulators\u201d to allow their currencies to appreciate against the U.S. dollar. The Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125) requires the Secretary of the Treasury to provide Congress every 180 days with \u201cenhanced analysis of macroeconomic and exchange rate policies\u201d for each major trading partner that has a significant trade surplus with the United States, a current account surplus, and \u201cengaged in persistent one-sided intervention in the foreign exchange market.\u201d In its latest report, Treasury determined that \u201cno major trading partner met all three criteria for the current reporting period.\u201d Treasury did place six major trading partners\u2014China, Germany, Japan, South Korea, Switzerland, and Taiwan\u2014on its \u201cMonitoring List.\u201d Four of those six major trading partners are in East Asia. In the 115th Congress, the Currency Reform for Fair Trade Act (H.R. 2039) would allow the imposition of countervailing duties on goods imported from a foreign country whose currency is determined to be \u201cfundamentally undervalued\u201d in accordance with the provisions of the act. \nMost East Asian monetary authorities consider a \u201cmanaged float\u201d exchange rate policy conducive to their economic goals and objectives. A \u201cmanaged float\u201d can reduce exchange rate risks, which can stimulate international trade, foster domestic economic growth, and lower inflationary pressures. It can also lead to serious macroeconomic imbalances if the currency is, or becomes, severely overvalued or undervalued. A managed float usually means that the nation has to impose restrictions on the flow of financial capital or lose some autonomy in its monetary policy. \nOver the last 10 years, the governments of East Asia have differed in their response to the fluctuations in the value of the U.S. dollar. China, for example, allowed its currency, the renminbi, gradually to appreciate against the U.S. dollar between 2007 and 2015, and has been actively intervening in foreign exchange (forex) markets since then to prevent the depreciation of its currency. Indonesia, however, has allowed its currency, the rupiah, to depreciate in value relative to the U.S. dollar over the last decade. \nBetween 2011 and 2013, some Southeast Asia nations\u2014such as Malaysia, the Philippines, Singapore, and Thailand\u2014appeared to have adopted exchange rates regimes to keep their currencies relatively stable with respect to China\u2019s renminbi. This supposed \u201crenminbi bloc\u201d may have emerged because those nations\u2019 economic and trade ties were increasingly with China. In addition, China was actively promoting the use of its currency for trade settlements, particularly in Asia. Exchange rate patterns for the last four years, however, have led some analysts to suggest the \u201crenminbi bloc\u201d may have weakened. \nThis report will be updated as events warrant.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/RS22860", "sha1": "5bd032b7270802eb3807cd7b5342acd8523fa4f9", "filename": "files/20170526_RS22860_5bd032b7270802eb3807cd7b5342acd8523fa4f9.html", "images": { "/products/Getimages/?directory=RS/html/RS22860_files&id=/1.png": "files/20170526_RS22860_images_c71eee51ac5680b1340828cee79cf99bac4fade2.png", "/products/Getimages/?directory=RS/html/RS22860_files&id=/0.png": "files/20170526_RS22860_images_40b659418adb35ec95853280116361142fc4143c.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/RS22860", "sha1": "016fcb0d86202b8d86ba8fce0c00a3350e001780", "filename": "files/20170526_RS22860_016fcb0d86202b8d86ba8fce0c00a3350e001780.pdf", "images": {} } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 439970, "date": "2015-03-31", "retrieved": "2016-04-06T19:18:27.713549", "title": "East Asia\u2019s Foreign Exchange Rate Policies", "summary": "Monetary authorities in East Asia have adopted a variety of foreign exchange rate policies, varying from Hong Kong\u2019s currency board system which links the Hong Kong dollar to the U.S. dollar, to the \u201cindependently floating\u201d exchange rates of Japan, the Philippines, and South Korea. Most Asian monetary authorities have adopted \u201cmanaged floats\u201d that allow their currency to fluctuate within a limited range over time as part of a larger economic policy. A \u201ccrawling peg\u201d is a special type of managed float in which a nation allows its currency to gradually appreciate or depreciate over time. China adopted a \u201ccrawling peg\u201d policy from July 2005 to July 2008, and again from June 2010 to the present. \nU.S. policy has generally supported the adoption of \u201cfree float\u201d exchange rate policies. Legislation has been introduced during past Congresses designed to pressure nations seen as \u201ccurrency manipulators\u201d to allow their currencies to appreciate against the U.S. dollar. However, most East Asian monetary authorities consider a \u201cmanaged float\u201d exchange rate policy more conducive to their economic goals and objectives. A \u201cmanaged float\u201d can reduce exchange rate risks, which can stimulate international trade, foster domestic economic growth, and lower inflationary pressures. It can also lead to serious macroeconomic imbalances if the currency is, or becomes, severely overvalued or undervalued. A managed float usually means that the nation has to impose restrictions on the flow of financial capital or lose some autonomy in its monetary policy. \nOver the last 10 years, the governments of East Asia have differed in their response to the fluctuations in the value of the U.S. dollar. Some, such as China, have allowed their currency to appreciate against the U.S. dollar; others have held the value of their currency against the U.S. dollar relatively unchanged. A few, including Japan and South Korea, have seen their currencies depreciate in value relative to the U.S. dollar. \nSome Southeast Asia nations\u2014such as Malaysia, the Philippines, Singapore, and Thailand\u2014may have adopted exchange rates regimes to keep their currencies relatively stable with respect to China\u2019s renminbi. This supposed \u201crenminbi bloc\u201d has emerged because those nations\u2019 economic and trade ties are increasingly with China. In addition, China has been actively promoting the use of its currency for trade settlements. \nThis report will be updated as events warrant.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/RS22860", "sha1": "5b5f8d3fe3048aaf9e8061510aff34b7ee87666a", "filename": "files/20150331_RS22860_5b5f8d3fe3048aaf9e8061510aff34b7ee87666a.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/RS22860", "sha1": "9b47bf3aba3b859b3f4deda3c58c687659dc34a4", "filename": "files/20150331_RS22860_9b47bf3aba3b859b3f4deda3c58c687659dc34a4.pdf", "images": null } ], "topics": [ { "source": "IBCList", "id": 3407, "name": "Asian Regionalism" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc491196/", "id": "RS22860_2010Aug16", "date": "2010-08-16", "retrieved": "2015-01-27T19:40:46", "title": "East Asia's Foreign Exchange Rate Policies", "summary": "This report examines the de facto foreign exchange rate policies adopted by the monetary authorities of East Asia. In some cases, there is a perceived discrepancy between the official (de jure) exchange rate policy and the observed de facto exchange rate policy. This report will focus primarily on the de facto exchange rate policies", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20100816_RS22860_f1477f6bcf3a38963520a39c9087f41181258a32.pdf" }, { "format": "HTML", "filename": "files/20100816_RS22860_f1477f6bcf3a38963520a39c9087f41181258a32.html" } ], "topics": [ { "source": "LIV", "id": "Foreign exchange", "name": "Foreign exchange" }, { "source": "LIV", "id": "International finance", "name": "International finance" }, { "source": "LIV", "id": "Foreign exchange rates", "name": "Foreign exchange rates" }, { "source": "LIV", "id": "International finance", "name": "International finance" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc689235/", "id": "RS22860_2009Jul16", "date": "2009-07-16", "retrieved": "2015-08-03T15:06:47", "title": "East Asia's Foreign Exchange Rate Policies", "summary": "This report examines the de facto foreign exchange rate policies adopted by the monetary authorities of East Asia. In some cases, there is a perceived discrepancy between the official (de jure) exchange rate policy and the observed de facto exchange rate policy. This report will focus primarily on the de facto exchange rate policies.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20090716_RS22860_27583a7618de1c257d67352ee73d1dbf6e0b72e5.pdf" }, { "format": "HTML", "filename": "files/20090716_RS22860_27583a7618de1c257d67352ee73d1dbf6e0b72e5.html" } ], "topics": [ { "source": "LIV", "id": "Foreign exchange", "name": "Foreign exchange" }, { "source": "LIV", "id": "International finance", "name": "International finance" }, { "source": "LIV", "id": "Foreign exchange rates", "name": "Foreign exchange rates" }, { "source": "LIV", "id": "International finance", "name": "International finance" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc805630/", "id": "RS22860_2008Apr10", "date": "2008-04-10", "retrieved": "2016-03-19T13:57:26", "title": "East Asia\u2019s Foreign Exchange Rate Policies", "summary": null, "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20080410_RS22860_a93848fce745bcb7770c6595ad4e70c5ae53a860.pdf" }, { "format": "HTML", "filename": "files/20080410_RS22860_a93848fce745bcb7770c6595ad4e70c5ae53a860.html" } ], "topics": [] } ], "topics": [ "Asian Affairs", "Economic Policy" ] }