An Empirical Study of whether East Asia Currencies Follow RMB Based on the Data of Nominal Exchange Rate against Dollar since 2005

The paper makes an empirical research on the nominal exchange rate of East Asia currencies against dollar by using GARCH model.It finds that RMB had a significant effect on Malaysian ringgit,Korea won,Singapore dollar and Taiwanese dollar before the Subprime Crisis,and Philippines pesos also had been affected by RMB besides the above-mentioned currencies after the Subprime Crisis.The study shows that RMB is emerging as an important "anchor" currency in East Asia,and that one mechanism to fulfill the role of "anchor" is to lead other currencies' nominal exchange rate against dollar.But the VIX index as a proxy for global market certainty is always significant,which indicates that RMB is not a stable "anchor".