1.On the choice of exchange rate regimes

The choice of an appropriate exchange rate regime should be approached pragmatically and take into account a variety of factors, including the size of an economy, the degree of openness, the size of foreign reserves, and ability of the government. Given the diverse circumstances in different countries, there is no one-size-fits-all exchange rate regime. To some developing countries, intermediate exchange rate regimes may be more appropriate choices.

2.On the consistency of exchange rate regime and other macro economic policies

No matter what kind of exchange rate regime an economy chooses, it should be backed by consistent domestic macro economic policies. This is the key to ensuring the sustainability and credibility of the chosen regime. Meanwhile, as one of macro economic policy instruments, the exchange rate policy should be in line with and complement other domestic economic policies in promoting the overall policy goals for economic development. Therefore, it is essential to keep an integrated and coherent macro economic policy system.

3. The role of IMF on the choice of exchange rate regime

Most of the currencies of developing countries are pegged to the major currencies. Therefore, the stability of exchange rate of major currencies is crucial for the sustaining the exchange rate regimes of developing countries. The IMF should play a good part in coordinating with major industrialized countries in an effort to minimize the volatility of major currencies and stabilize international financial markets. Major international financial institutions may make recommendations on appropriate exchange rate regimes for developing countries, but it is up to the developing countries to make their own choices. There should be no discriminatory conditions imposed on those countries, which choose their own regimes.

4. On regional cooperation in exchange rate regimes

Collaboration on exchange rate regime is an advanced form of regional financial cooperation. We support the ongoing and in-depth studies on regional monetary cooperation, drawing on European experiences in this respect. At present, the priority of the financial cooperation in East Asia is to further enhance the self-financing mechanism, and strengthen the ability of the East Asian to withstand financial crisis. This will build a solid foundation for more comprehensive and advanced form of financial cooperation in the region.