Renminbi's behaviour influences whole region

The HKMA's empirical analysis finds that the movements of the renminbi have begun to affect other currencies in the region independent of those of the dollar. However the influence of China's currency is constrained by its own limited fluctuations against the greenback.

The analysis does not indicate whether the renminbi's influence results from government policy of the other Asian economies or market forces. However, it predicts that the renminbi's role in the region is likely to grow over time as the economy of China's mainland becomes increasingly important and the currency more flexible.

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