Executive Summary

I. Introduction

II. Global and East Asian Exchange Rate Systems

III. Fixed and Flexible Exchange Rate Systems
1. Assessment of fixed and flexible exchange rate systems
2. Optimum currency area (OCA)

IV. Korean Exchange Rate System and the Effect of Fluctuations
1. Transitions of Korean Exchange rate policy
2. The effect of exchange rate fluctuations on the economy

V. The Need for Exchange Rate and Monetary Cooperation in East Asia

VI. Exchange Rate Cooperation in East Asia: Flexible BBC System
1. Basket currency system
2. Flexible bands
3. Crawl method

VII. Fixing the Yen/Dollar Exchange Rate within a Band

VIII. Adjustment of Policy Bank Rate

IX. Economic Policy Support for the BBC System
1. The experience of Singapore with the BBC system
2. Sound and consistent policy
3. The introduction of the BBC exchange rate system in Korea
4. Monitoring, mutual surveillance, and resource sharing

X. Conclusion

References

Appendices