Recommendations On The Path Choice And Policy Arrangements For The Reform Of The RMB Exchange Rate Regime

This paper finds that the reform of the RMB exchange rate on July 21, 2005 has had positive effect on the relief of the pressure of the RMB under foreign exchange controls. And the paper also finds that the exchange rate reform on July 21, 2005 is quite effective in reducing the RMB further revaluation pressures by promoting imports and halting exports. Finally the paper recommends"Band Exchange Rate"in the short time and"Floating Exchange Rate System"in the long run to steer China's current exchange rate policy , because they best satisfy the needs of China's monetary authorities to fight international speculation on China's currency and to regain"control and gradualism"in the process of exchange rate reform.