A study by the state development think tank Philippine Institute for Development Studies PIDS) warned against moves to raise the value of East Asian currencies.
Dr. Josef Yap, PIDS senior research fellow, noted that most of East Asian currencies have appreciated considerably compared to the minimum levels that were attained. He explained that this indicator, along with the level of accumulated reserves in these countries, does not support the argument for the need for these currencies to appreciate sharply, that is in the neighborhood of 15 to 20 percent.
Calls have been made by some quarters for the revaluation of the Chinese yuan and other East Asian currencies given Chinas huge trade surplus with the United States. A revaluation or appreciation of the Chinese yuan, which means that the exchange rate against the dollar will decrease, will make Chinas exports more expensive and imports into China cheaper thereby reducing its trade surplus with the US.
There are also debates that the revaluation of the yuan should be accompanied by an appreciation of other currencies in East Asia since focusing on the yuan alone makes little economic sense because the trade deficit of the US is with the entire region.
Meanwhile, the Philippine peso remains to be one of the most undervalued currencies in the region.
Dr. Josef Yap, PIDS senior research fellow, noted that most of East Asian currencies have appreciated considerably compared to the minimum levels that were attained. He explained that this indicator, along with the level of accumulated reserves in these countries, does not support the argument for the need for these currencies to appreciate sharply, that is in the neighborhood of 15 to 20 percent.
Calls have been made by some quarters for the revaluation of the Chinese yuan and other East Asian currencies given Chinas huge trade surplus with the United States. A revaluation or appreciation of the Chinese yuan, which means that the exchange rate against the dollar will decrease, will make Chinas exports more expensive and imports into China cheaper thereby reducing its trade surplus with the US.
There are also debates that the revaluation of the yuan should be accompanied by an appreciation of other currencies in East Asia since focusing on the yuan alone makes little economic sense because the trade deficit of the US is with the entire region.
Meanwhile, the Philippine peso remains to be one of the most undervalued currencies in the region.
