Comparative Study On The Choice Of Exchange Rate Regimes

Using the IMF de facto classification, the paper analyses the ratio change of IMF members on strictly fixed exchange rate regime, middle exchange rate regime and free floating exchange rate regime, and finds no support for"the Hollow hypothesis". The ratio change of exchange rate regimes in developing countries, the cost of using strictly fixed exchange rate regime and the constraints of using floating exchange rate regime prove that on the long run, the middle exchange rate regime is still the choice of many developing countries, and exchange rate arrangement diversification is still dominant characteristic of international exchange rate regimes. As the biggest developing country, China should choose the middle exchange rate regime because at present, like most of developing countries, Chinese financial market is underdeveloped, and the middle exchange rate regime benefits the stability and the development of domestic economic.