Research On The Equilibrium Exchange Rates Of The RMB

This paper estimates the equilibrium exchange rates of the RMB by use of the model of the equilibrium exchange rates, and evaluates the historical change of the RMB exchange rates. The core of the theory of the equilibrium exchange rates is to analyze the effect of basic economic factors on the equilibrium exchange rates, and to estimate the equilibrium exchange rates according to systemic relations between the equilibrium exchange rate and the basic economic factors. With different research angles and methods, there are the different types of the theories of the equilibrium exchange rates. Wholly speaking, at present, the systemic research outcomes of those include Fundamental Equilibrium Exchange Rates, Behavioral Equilibrium Exchange Rates, Natural Real Exchange Rates, and Equilibrium Real Exchange Rates. They research the equilibrium exchange rates of the developed and the developing countries from different angles, respectively.This paper explores the issue of RMB exchange rate formation mechanism. By econometric analysis, we find that domestic investment, economic growth, used effect of the foreign capital and the foreign trade are the long-run determinative factors of the RMB equilibrium exchange rates. The analytic outcome indicates that the RMB exchange rates have entered into the phase of relative steady. Hence in the near future, the RMB exchange rates should insist on the principle of stabilization and small changes, and shouldn't make any great adjustment. In future reform, the floating bands of the RMB exchange rates should be extended so as...