Study On Theory Of Exchange Rate Target Zone

Exchange rate plays an important role in national economy. After the exchange rate reform in 1994, in fact, RMB exchange rate is a pegged exchange rate.Firstly introducing arrangement of exchange rate and analyzing all exchange rate , think that exchange rate have both virtue of pegged exchange rate and floating exchange rate .Through reviewing RMB exchange rate developing course and studying RMB exchange rate , put forward that current RMB exchange rate regime must be reselected and exchange rate target zone is the our better choice. RMB exchange rate target zone includes central exchange rate and fluctuating range of RMB target exchange rate zone . Then base on Edward's theory of equal exchange rate, construct target exchange rate zone of RMB . According to our experience , we design exchange rate margin and exchange adjustment .In a word, under the background of fact that China's finance is opened further, RMB exchange rate must be reformed, and exchange rate target zone is the our better choice .