Do External Political Pressures Affect the Renminbi Exchange Rate ?

@inproceedings{Liu2011DoEP,
  title={Do External Political Pressures Affect the Renminbi Exchange Rate ?},
  author={Li-gang Liu and Laurent L. Pauwels},
  year={2011}
}
This paper investigates whether external political pressure for faster renminbi (RMB) appreciation affect both the daily returns and the conditional volatility of the RMB central parity rate. We construct several political pressure indicators pertaining to the RMB exchange rate, with a special emphasis on the US pressure, to test the hypothesis. After controlling for Chinese macroeconomic surprise news, we find that US and non-US political pressure does not have a significant influence on RMB's… CONTINUE READING