New Currency Strategy to Shield East Asian Firms from Exchange Rate Chaos
Financial managers in East Asian firms are looking for ways to protect themselves from sudden changes in exchange rates, like those seen in the Asian currency crisis of 1997. To counter these effects, it is suggested that each East Asian country should have its own currency basket with a mix of yen, dollar, and euro. This approach is based on analyzing Japan's foreign trade with East Asian countries and the impact of the dollar/yen rate.