Abstract:

Although the de factor dollar peg system adopted by East Asian countries after the Breton Woods Monetary System was the main cause of Asian financial crisis in 1997, the linkage of home currencies with the US dollar, as some economists pointed out, has returned to the pre-crisis condition for some countries in this region. The success of the European currency cooperation has stimulated people's great interest in the forthcoming currency cooperation among East Asian countries. The de factor dollar peg system re-adopted is just a second-best choice for East Asian countries and the basket peg system will be more reasonable in a short period of time. But in the long run East Asian countries should learn from the inherent dynamics of European currency cooperation so as to enhance their forthcoming currency cooperation.

Key words: the de factor dollar peg system, path dependence, inherent dynamics, regional currency cooperation