The Study On The Reform Of RMB Exchange Rate Regime

There are a series of financial crises that happened in the emerging markets in the 1990s, from Mexico Currency Crisis in 1994 to Asian Financial Crisis in 1997, from Russia Crisis in 1998 to Brazil Crisis in 1999, all of those crises show that in a world with high capital mobility, the selection of exchange rate regime has direct impact on the development, stability and safety of a country's economy. During the process of the economical globalization, China's economy contacts the world's economy more frequently, and the world's economy is becoming more and more important to China. In order to keep economic development stable and fast, China has to find out a suitable exchange rate regime to be the tache between China's economy and world's economy. China conducted a successful reform of the RMB exchange rate regime on July 21, 2005.The new exchange regime based on the market supply and demand with reference to a basket of currencies.The paper explores the reform of RMB exchange rate regime, and explains the reasons and the influences of the reform. The paper includes five Chapters: Chapter 1 reviews the history of RMB exchange rate regime, and generalizes the characteristics of RMB exchange rate regime in different periods. Chapter 2 summarizes the literatures of RMB exchange rate regime, basically on the part of the choice of intermediate regimes. At the end, the chapter carries on comments on the literatures in brief. Chapter 3 analyses the disadvantages of U.S. dollar pegging regime, and combined with the prepared work that China government has done for the reform of exchange rate regime and the macro economic situation, author get a conclusion that it is the time for the reform of RMB exchange rate regime. Chapter 4 analyses the influence of the reform on enterprises, foreign trade, the foreign exchange reserves, monetary policy and macro economic, in the light of the Evaluations on the contents of the present reform. Chapter 5 prospects the way of further reform of RMB exchange rate regime, and gives some suggestions about the further reform of RMB exchange rate regime.