The relationship between Renminbi’s exchange rate and East Asia currencies before and after the fina

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Purpose-The purpose of this paper is to analyze the following behavior of six currencies in East Asia to RMB before and after the financial crisis.Design/methodology/approach-Using foreign exchange spot rate data from 2005 to 2013,the authors investigate the dynamic relationship of RMB and six East Asia currencies with method of DCC-GARCH and quantile regression.Findings-The authors get such conclusions:first,most currencies indeed follow RMB in whole sample period but the correlation is time-varying;second,the degree of co-movement increased as a whole,which reflects that the influence of China in East Asia rose continuously;third,the East Asian currencies behaved differently before the crisis,but reveal some similarities after the crisis,and prefer to follow when RMB depreciates and reluctant to follow when RMB appreciates at a comparatively large degree.The authors argue that it may be related to the different macroeconomic environment faced by East Asia region before and after the crisis,the rising economic influence of China and the development of RMB intationalization’s practice.Originality/value-The effort could strength the understanding to the following behavior of East Asia currencies to RMB,the authors also point out that RMB has been as regional currency anchor,but the role of anchor is unstable,and is affected by intational economic circumstance,China should adapt some methods to strength RMB’s influence to East Asia currency.
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