How Useful Is an Asian Currency Unit (ACU) Index for Surveillance in East Asia?

No 413, ADBI Working Papers from Asian Development Bank Institute

Abstract: An Asian Currency Unit (ACU) index is constructed using an alternative procedure which minimizes a basket or portfolio of assets expressed in terms of national currencies. Using this estimated ACU Index and an ACU Deviation Indicator, the main finding of this study based on the current trajectory of East Asian currencies relative to this regional ACU average or benchmark, is that there is a formation of two contrasting groups of countries in the region—one a group of strong currencies and the other a group of weak currencies. We suggest several ways in which the region can capitalize on using this ACU index in the immediate term for surveillance purposes, particularly, for purposes of assessing “over- and undervaluation” of the individual currencies from the regional ACU average and for flagging emerging vulnerabilities in individual economies in the region.

Keywords: asian currency unit; acu index; amro; acu deviation indicator; beggar-thy-neighbor (search for similar items in EconPapers)
JEL-codes: F15 F31 F41 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-03-29
New Economics Papers: this item is included in nep-sea
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: How useful is an Asian Currency Unit (ACU) index for surveillance in East Asia? (2015)
Working Paper: How Useful Is an Asian Currency Unit (ACU) Index for Surveillance in East Asia? (2013)
Working Paper: How Useful Is an Asian Currency Unit (ACU) Index for Surveillance in East Asia? (2013)
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