| Exchange rate is important variable of one country's macro economy. It has significant influence, which is realized through material exchange rate arrangement, on economy circulating--especially under open economy. So, it's most important to keep the stability of macro economy, build a perfectly running finance system and realize the sustainable development of finance that selecting sound exchange rate regime.In 1994, foreign exchange management system reform has been executed and the single, managing floating rate regime based on market supply and demand has been running in China since then. 1996, China has realized RMB exchangeable under current account. The world economy development has slowed down since 2001 and 9.11 incident has accelerated its decline. Just at that time, China entered WTO. After entering WTO, China will widen and accelerate its open to the world, which means that Chinese exchange rate arrangement is faced with new challenge. It becomes the key problem on how to summarize the lesson and experience of current RMB exchange rate regime and select the optimum exchange rate regime fitting for Chinese economy development status under the new intra and international economic environment.Chinese current exchange rate regime is managing floating rate one. Because of capital and finance account control, RMB exchange rate is determined by current account balance, especially international trade balance, on the whole. The change of RMB exchange rate is basically fit for Chinese macro economy development. Under the high increasing of GDP, RMB exchange rate presents depreciating trend. But with the economy strength building up, RMB exchange rate shows appreciating out of depreciating, which is according with macro economy discipline.Chinese current exchange rate regime is single, managing floating rate regime based on market supply and demand .It is theoretically benefit for overcome partially the short of perfect fixed rate or entirely floating rate regime. Under such a system, People's Bank manages and supervises exchange rate which can minus appreciating pressure of RMB during the economy development process and central bank can take efficiency measure combining capital control policy to stabilize RMB exchange rate and get through short blow bringing by event such as south and east Asia finance crises. But, this regime has many shortages on operating, which greatly counteract the functions of RMB exchange rate regime on national economy.First, the forming mechanism of RMB exchange rate is not perfect. The base of RMB exchange rate is bank purchase-and-sale system. Under such system, residents and companies can't hold foreign exchange willingly. The exchange rate formed by 'sale by force' and 'purchase by restrict' is not the real market price.Second, the foreign exchange market isn't perfect. The main participants of Chinese foreign exchange market-foreign exchange banks are restricted by firmly market-entering rules. At the same time, central bank has established firmly limit on foreign exchange banks' holding exchange which limited the dealing between banks. Central bank has great controlling power on the exchange rate forming and the market dealing is almost the central controlling pricing mechanism.Third, equilibrium RMB exchange rate is difficult to fix on and exchange rate is short of flexibility. Sound theoretic equilibrium exchange rate can't be get when central bank makes certain equilibrium exchange rate. This takes great uncertainty to central bank managing macro economy and regulating RMB exchange rate. Since 1994, RMB exchange rate has kept the fixed proportion with American dollar. Chinese exchange rate regime is actually the fixed rate regime to American dollar. That means the regime is short of flexibility.Fourth, the system cost to maintain the fixed rate regime to American dollar is high. On the one hand, fixed regime makes RMB short of competition when other moneys are depreciating to American dollar and this will have export decrease. On the other hand, fixed...
|
PDF Full Text Request