Exchange Rate Market Pressure Of RMB Calculate, Effection And Refree

Exchange rate is the most important comprehensive price index used in international economic transactions and executes the function of transforming price. So it becomes the most important lever of regulating trade balance. Therefore many countries take exchange rate as an adjustment instrument in order to regulate trade balance. The effect of exchange rate is more and more apparent.This paper mainly studies exchange market pressure. First of all, this paper generally reviews relavant theories and studies, and, on the basis of that, it makes a classification of exchange pressure in our country and point out that exchange market pressure is the basis of exchange pressure, it determines the whole exchange pressure. Afterwards, adopting Weymark's definition of exchange market pressure and aplying qualitative and quantitaive analysis, this paper measures the exchange market pressure of RMB. Qualitative analysis adopts ADF and Three Stage Least Square. This paper chooses small open economic model which is applicable in China and by Three Stage Least Square estimates its structural parameter, on the basis of which calculates the exchange market pressure faced by RMB in the years between 1997 and 2006 and analyzes the calculated results. Through the analysis, this paper discovers that RMB suffers obvious devaluating pressure after Asian Financial Crisis. Due to Chinese economic development and the imbalance of its trade, RMB suffers upvaluating pressure, and tendency is expanding. Finally, according to qualitative and quantitative analysis and the measured results, this paper analyzes the influence and future trend of the change of RMB's exchange rate and proposes correspondant suggestions to remove the exchange market pressure of RMB. In the future, our country should continually perfect the interfering environment and operating system of exchange market and enlarge the fluctuation gap of exchange rate so as to transfer the exchange rate system to absolute floating exchange rate system. In the meantime, we should control the interior currency supply and our exchange reserve and take advantage of the fluctuation of RMB's exchange rate, promoting the upgrading ofindustrial structure in our country and enlarging the domestic demand so as to maintaincontinual, healthy and harmonious economic development.