A Study On Coordination Of China's Interest Rate Policy With Exchange Rate Policy In The View Of Internal And External Equilibrium

With the coordination of interest rate policy and exchange rate policy as the direct clue and the realization of internal and external equilibrium in an open economy as the hidden thread, the dissertation infers the relationship between interest rate and exchange rate from the western external and internal equilibrium theories and exchange rate determined theories so as to find the way to coordinate them. On the base of positive and negative comparison about liberalization reform of interest rate and exchange rate and capital account opening among some typical countries, the author analyzes China's macroeconomic situation and seek the perfect key about the coordination of interest rate policies and exchange rate policies.This article contains five Chapters:Chapter 1: The theoretical review of external and internal equilibrium theories and the definitions of some important relative conceptions.Chapter 2: The relation between the interest rate and the exchange rate in international finance theory are discussed, which is the basis of transmission mechanism of interest rate-exchange rate.Chapter 3: International comparison about coordination of interest rate policies and exchange rate policies.Chapter 4: The coordination practice of China's interest rate policies and exchange rate policies is analyzed.Chapter 5: Solving problem. To harmonize the interest rate policy and exchange rate policy, reform measures are proposed in the course of capital account liberalization.There are some important conclusions in article:1. Interest rate policy provides the foundation for internal equilibrium and exchange rate policy is the linchpin of external equilibrium. The coordination of interest rate policy with exchange rate policy is prerequisite and necessity for internal and external equilibrium.2. The model of interest-rate parity between China and USA isn't distinct. There are much conflict between interest rate policies and exchange rate policies in China. It is necessary to further reform China's interest rate and exchange rate formingmechanism.3. The liberalization reform of interest rate should be made firstly. At the same time, China should improve the flexibility of exchange rate mechanism and gradually open its capital account.