The Research On The Selection Of Anchor Currency In Asian After Financial Crisis

The economic crisis makes countries in Asia realize that under the background oflarge-scale international capital flows and frequent fluctuations of the US dollarexchange rate, it is irrational for the Asian exchange rate regime to pegged to the USdollar. For the highly correlated entity economy within Asian, unperfect of theregional monetary cooperation have serious negative impact on financial stability andeconomic development.the complexity of the political and economic environment in Asia and the lack ofdominant currency monetary cooperation makes the process advancing hardly.Therefore it is very imperative to choose a strong anchor currency in the region todominate the Regional monetary integration and economic integration, to avoidanother outbreak of the financial crisis and lay the foundation for sustained and stabledevelopment of the Asian economies.In this paper, Qualitative analysis and quantitative analysis are combined.Quantitative analysis is mainly using a new external monetary model improved byFrankel and Wei in2008,and collecting a big huge of historical exchange rate, to testthe weight changes of world’s four key anchor currency in the Asian currency basket,as well as RMB’s influence in Asia after the financial crisis.The results showed thatthe weight of US dollar changed little after the financial crisis, the U.S. dollar is stillthe main anchor currency of Asian currency basket; the weight of JPY reduced a lot;the weights of EUR and GBP changed little; the RMB’s influence increased and showthe potential to become the regional dominant anchor currency; Asian countries areincreasingly focusing on the diversity of the currency basket, and improving theflexibility of exchange rate system.With the upgrading of China’s comprehensive strength, and continuously advanceof the internationalization of the RMB, the leading voice of RMB becoming thedominant anchor currency is increasing. Therefore, we should vigorously pushforward the internationalization of the RMB, and strive to make the RMB become thedominant anchor currency in the Asian region, leading Asian to achieve the goal ofmonetary integration and economic integration.