Reordering The Global Monetary Hierarchy In The Aftermath Of The Russia ukraine War

Abstract

This paper develops an analytical framework to examine recent shifts in the global monetary hierarchy. It focuses on how the Russia–Ukraine war (2022) has influenced the relative importance of core currencies in shaping the exchange rates of peripheral currencies. Using the Frankel–Wei regression method, the study evaluates the war’s impact on the de facto exchange-rate arrangements of the Chinese yuan as an emerging regional currency, and of the Malaysian ringgit and the Singapore dollar as peripheral Asian currencies. The analysis relies on EViews 12 to estimate the implicit weights of major anchor currencies before and after the war. The empirical evidence indicates a decline in the implicit weight of the us dollar in the Yuan’s de facto exchange rate arrangement in the post-war period, even though it remains the dominant anchor currency, accompanied by a higher weight for the Japanese Yen. The regressions for the two Asian currencies further indicate that the Yuan has strengthened its role as a regional anchor for the Malaysian ringgit, with a more limited anchoring effect on the Singapore dollar. At the same time, the Japanese yen has gained importance, whereas the euro has lost relevance for both currencies. These findings suggest a gradual reshaping of the monetary hierarchy in Asia following the war .