Jamshaid Ur REHMAN*, Aneel SALMAN** and Hadiya BAHADUR***
The study assesses the macroeconomic fundamentals of ASEAN+3+3 countries in light of
exogenous shocks from the U.S. and Chinese exchange rates. The research also delves into
the impacts of the Asian Financial Crisis (AFC) and the Global Financial Crisis (GFC) on selected
macroeconomic variables. The exogenous shocks/crises cause deterioration in the exchange
rate and, via trade and financial channels, fetch immediate fluctuations in the foreign
demand for domestic goods, ultimately resulting in the volatility of output, interest rate and
prices. The findings reveal that these shocks have a profound impact on macroeconomic fundamentals,
but the repercussions of U.S. shocks wane over time for a majority of the countries.
Intriguingly, in the aftermath of the AFC and GFC, the ramifications of the Chinese economy
intensified across various metrics and nations. In a nutshell, the study signifies that
ASEAN+3+3 countries under an open economy framework are sensitive to the changes in
the exchange rate of major international currencies, i.e., the U.S. dollar and Yuan.