Chuỗi hội thảo nghiên cứu trong lĩnh vực Ngân hàng – Tài chính – Kinh tế (SOBSR#8)

Working Paper:

Making Sense of China’s Sterilized Foreign Exchange Intervention Policy

 Author(s): James Riedel

William L. Clayton Professor of Economics Johns Hopkins University (SAIS) 1740 Massachusetts Avenue NW Washington DC 20036, email: jriedel@jhu.edu

Presenter: Prof. James Riedel

Language: English 

Abstract:  

From about 2002 to 2010, China intervened heavily in the foreign exchange market, amassing several trillion dollars of foreign exchange reserves. To avoid the monetization (and inflationary consequences) of its foreign exchange purchases, the PBOC compelled commercial banks to buy large amounts of sterilization bonds and, additionally, raised commercial bank reserve requirements. In this seminar, I consider the rationale for China’s sterilized intervention policy and assess its costs and benefits. This assessment is relevant to several recent controversies, including whether China “manipulates” its currency and whether, by manipulating its currency, it contributed to a “global saving glut” that allegedly contributed to the global financial crisis in 2009. The question of whether China’s sterilized intervention policy has lessons for macroeconomic policy in Vietnam may be discussed.

¹ http://www.fetp.edu.vn/en/faculty/james-riedel/   

James Riedel is the William L. Clayton Professor of International Economics at Johns Hopkins University School of Advanced International Studies, where he has been on the faculty since 1976. His interests lie in economic development, international finance, and international trade theory and policy. He is member of the Board of Directors of the Vietnam Debt Fund (Dragon Capital Group). He has been an advisor to the Government of Vietnam and a consultant to the World Bank, the Asian Development Bank, the Inter-American Development Bank, the China Development Bank, the OECD and other international organizations and corporations. He is on the advisory boards of the American Committee for Asian Economic Studies and the Hong Kong Centre for Economic Research. He has been a research fellow at the Institut fur Weltwirtschaft (Kiel), a visiting fellow at the Australian National University and Nuffield College, Oxford, and a Fulbright Professor in Vietnam. He is an Associate Editor of the Journal of Asian Economics and on the advisory boards of The World Economy and Asia Pacific Economic Literature. He has published numerous books and articles on international trade theory, international finance and economic development. His most recent book is How China Grows: Investment, Finance, and Reform (Princeton University Press, 2007).

Note: Slides will be provided when requested in email at: ngominhhai@ueh.edu.vn