Research On The Currency Substitution And Monetary Cross-border Circulation

With the further development of China's economy in open conditions, currency substitution and currency cross-border circulation and lasting to appear in front of China, currency substitution and currency cross-border circulation both in its essence, is still in its theoretical based on, are interlinked, which is exploring a coordination mechanism for cross-border circulation of currency substitution and currency provides a theoretical feasibility.This research attempts a theoretical framework compatible investigated currency substitution and currency cross-border circulation problems, and Currency Substitution and cross-border dirculation propulsion mechanism and security mechanism. At the same time, the present study attempts to careful consideration: Currency Substitution and RMB cross-border circulation currency substitution theory and monetary theory of international basis, both qualitative analysis also includes quantitative estimates; Latin American countries, Southeast Asian countries, currency substitution in Eastern European countries and the U.S. dollar, the Japanese yen and the euro cross-border circulation of a comprehensive study provides lessons and experiences for the Chinese currency substitution problem solving and RMB cross-border circulation.The main conclusion in this paper:the opening of the capital account should be the basic principles of China's economic, financial security and health development, to the timely and orderly manner according to the specific conditions of the progressive realization of the opening of the capital account; open capital account and capital free flow will be the trend of the times, the implementation of the three-step exchange rate liberalization strategy, and ultimately achieve a freely floating exchange rate; improve the RMB forward foreign exchange market can reduce the expected depreciation of the local currency rate, to protect their own will not be large-scale currency substitution occurs. Eliminate the inflation bias of monetary policy; improve the credibility of monetary policy, to be monitored by the international short-term capital flows, and to prevent the occurrence of massive currency substitution. Healthy and competitive banking sector has become the common currency for RMB important. This requires us to continue to reduce the rate of non-performing loans of the commercial banks and guarantee due to the capital adequacy ratio to promote international commercial banks, improve the financial market and inspire the innovation of financial instruments.