Sze-Wan Leung’s research while affiliated with The University of Hong Kong and other places

We identify factors that may explain the peg durations in nine Asian countries, via a logit model. Despite some fundamental differences between Asian and Latin American countries, our results are similar to Klein and Marion (1997) on Latin American countries. We find that the real exchange rate relative to the US, the level of international liquidity, openness of the economy and its geographical trade concentration contribute to the likelihood of a devaluation in Asian countries. However, we find no evidence that the likelihood of a devaluation in Asian countries first rises and subsequently declines during the first year of a peg.