A Study On The Choice Of RMB Exchange Rate Regime

The choice of exchange rate system is a complex project.since Jamaica Agreement had been set in 1971, every country had set the exchange rate system adapt to its country's situation accordingly its economic developing condition and level. What are the theories of this choice? To aim at the basic question, the paper is based on finally target of choice of exchange rate system, integrating the three trait that the developing countries face international economic condition, that is, the world market is monopolization and competition, the capital flow acuity and economic integration acute, bringing out 8 principles to measure weather the choice of exchange rate system is in reason, that is Tingerbent rule, Mundell assignment, finance policies have long time lag and have not effect sometimes, avoiding Meade's conflict, seigaiorage, the world market is monopolization and comepititon, decrease credibility and time inconsistency, every country facing pace three ternaltriangle.The first to the fouth rules negate the best of the pure fixed exchange rate regime and hdrdly Pegging exchange rate regime. Although agility exchange rate regime even including the cleanly floating exchange rate accords with the first to the fifth rules, it fails in the sixth rule, that means the cleanly floating exchange rate regime is not perfect exchange rate regime. The 8 principles indicate that compages of the exchange rate stabilization and money policy independence is the correct choice for many developing countries, that is, administrant floating exchange rate regime is the best.Based on the analysis of the international exchange rate regime and East southern countries, we conclude that : the change of exchange rate regime must have domestic economic policy sustaining, and the choice of exchange rate regime should suit the economic circumstance and the change of environment. East southern countries's tora show that affiliation exchange rate regime could not reflect its country economic running rule, the regime is relation with singal money , To level off exchange rate , It must belost its independent of money policy, Generally, central bank's policy target of exchange rate is to keep the balance of international account, and bring the nominal pivot function into action; to have enough flexibility to prevent the market demand and supply from outer strike while crisis. So the pegging exchange rate regime is not adopt to the economic development.This paper outlines the history of reforms of RMB exchange rate system, and analyzes the advantages and disadvantages of the current exchange rate system. Using the thorough data, the author emphasizes that in the current exchange rate regime, there is neither good market exchange rate formation mechanism, nor the control mechanism of stabilizing exchange rate. What's more, the exchange rate regime can not provide convenience for macroeconomic control. So, the exchange rate being carried out is transitional. The floating regime of RMB is an unavoidable trend under the circumstance of globalization of world economy and rapidly developing economy of China.