Study On Exchange Rate Regime Of Chinese Currency

Along with the reformation of China's economic system, the exchange rate regime of Chinese currency has experienced the era of planned economy and the Reformation and Opening. In 1994, we successfully carried out the reformation of the exchange rate regime, which played an important role for the continual development of China's economy in the next several years. However, as the enlargement of our opening market and the improvement of the economy marketization, the drawbacks of the current exchange rate regime gradually take on. Generally speaking, those are the problems that exist in the mechanism of forming and adjusting exchange rate. On one hand, since foreign exchange banks, enterprises, residents couldn't freely hold the foreign exchange themselves, the exchange rate of Chinese currency couldn't adequately reflect the supply and demand of the foreign exchange market; On the other hand, because of the obvious interference of the Central Bank, the exchange rate, whose variety lacks of flexibility, couldn't act as a lever of economy sufficiently. Therefore, what is the manageable floating exchange rate regime?by name in our country at present is actually a US dollar-pegged exchange rate regime. This exchange rate regime is of great need of reformation because of the shortcomings that existing now or even in an unknown period after China's entry into the World Trade Organization (WTO). Aiming at the problems that exist in the mechanism of forming and adjusting exchange rate, the composition gives some suggestions. That is on the basis of the exchange rate marketization, to establish the exchange rate adjustment mechanism, which is mainly of indirect control by the Central Bank, and to undertake, at the same time, the Reformation of Property Rights, to create a system premier for the free convertibility of Chinese currency.