Risk Analysis Of The Reform Of RMB Exchange Rate Regime

Since Jan1st,1994,the reform of RMB exchange rate regime has been executed.The single, managed floating rate regime based on market supply and demand has been running since then. This exchange rate regime has been a floating rate under supervision in name but a fixed exchange rate connected with US dollar in practice. In 2001,China entered WTO. With the deepening reform of economic system and the further opening towards outside, RMB exchange rate caught more concerned and there are more issues about the reform of RMB exchange rate regime. First of all, the empirical section in this paper makes analysis on fluctuation of nominal exchange rate and real exchange rate, then analyzes the realationship between exchange rate and economic assets since 1994. On the basis of that, the author attempts to build up the equilibrium exchange rate model of RMB by comparing and analyzing the western equilibrium theories of exchange rate. The author calculates the equilibrium exchange rate of RMB from 1980 to 2003 by modern econometric methods-----cointegration and H----P filter. The author draws conclusion that disequilibrium degree of RMB exchange rate is reasonable and the present RMB exchange rate regime contributes a lot to economic growth. Then author makes risk analysis on some plans about the reform of RMB exchange rate regime and draws conclusion that these plans can cause high risks which do not acceptable to China. Then the author proposes corresponding reform measures to the reform of RMB exchange rate regime and analyzes the economic situations can bear the risks which may rise from the reform measures.