The Post-crisis Exchange Rate Management in Selected East Asian Countries

This article examines the post-crisis exchange rate management in the selected East Asian countries: Indonesia, Korea, the Philippines, and Thailand. The main findings are as follows: First, the trends of the coefficient of variation in the monthly nominal exchange rates and foreign exchange reserves revealed that the exchange rate flexibility of all the sample countries had increased under the "soft peg" regime from the pre-crisis period towards the post-crisis period. Second, the result of the Frankel-Wei type of regression analysis with the Chow's test showed that the Philippines and Korea might reduce the US dollar dominance while Korea and Indonesia might raise the weights assigned to the Japanese yen and the euro respectively, in their post-crisis exchange rate management, and that all the sample countries could raise sensitivity to their domestic inflation rates in their post-crisis exchange rate management. The policy implication in the findings above lies in the significance of inflation rate as one of the factors for determining a reference rate in the exchange rate management.