The nominal RMB to dollar exchange rate appreciated to 8.3 yuan per dollar, or by about 5 percent between the beginning of 1994 and 1997 when the financial crisis was at its worst in Asia. This proves that RMB exchange rate was fluctuating and floating, reflecting the characteristics of a managed floating exchange rate regime. 2.
The Asian financial crisis in 1997 caused a slow down in the improvement of managed floating exchange rate regime. After June 1997, as the crisis deepened, some Asian currencies depreciated by a large margins. With Chinese export seriously affected, there were strong domestic opinions calling for RMB’s depreciation. If it took place, it would be understood by various parties.