The Research On The Choice Of RMB Exchange Rate System

As an important part of economic system, the exchange rate system is of great importance to the growth and stability of the national economy. With China joining WTO and the financial industry opening gradually, RMB exchange rate system is confronted with great challenges .So it is of particular significance for us to choose proper exchange rate system that benefits the healthy and stable development our country's economy against financial risks .Since the reform of RMB exchange rate system in 1994,China has realized the exchange in RMB current account .It comes out managing and floating exchange rate system nominally, however it is changed into a fixed exchange rate system in practice. It costs too much for China to do so, because Chinese economy depends on other countries increasingly. There are many drawbacks in the current closing and selling system of fore ign exchange and the formation mechanism of exchange rate, for instance they weaken the independence of monetary policy, do bad to the deepening of foreign exchange market and the market adjusting function of the exchange rate and face the enormous foreign exchange reserve of the Central Bank with great exchange rate risk .The conflict between the current RMB exchange rate system and the validity of monetary policy will be more prominent in the further opening of Chinese finance .So it is an urgent task to quicken the tempo of RMB exchange rate system reform.Based on the basic theories of the exchange rate system thesis compares the advantages and disadvantages of various exchange rate system and discusses the basic principles of the choice of exchange rate system. Meanwhile by studying such factors influencing the choice as the scale of economy, the extent of financial development, degree of economic opening and the structure of trade ,I think that the choice of RMB exchange rate system can neither lose contact with the opening economic structure that develops increasing nor overlook the current situation of our country's transactional economy and that we should consider the comprehensive interests and reform RMB exchange rate system gradually that is ,we may take transitional policy that RMB is fixed on a basket of currencies in the near future ,carry out the crawling policy in the medium term and implement the real managing and floating exchange rate system finally with the progressive opening of Chinese capital items and theimprovement of the ability monetary adjustment and control.