Research On The Market Maker Under The Reform Of The RMB Exchange Rate Forming Mechanism

With the development of the reform of the RMB exchange rate forming mechanism, the market maker system was introduced comprehensively in the inter-bank foreign exchange market at the beginning of 2006 in our country. So was the quote-driven mechanism by market makers. The inter-bank foreign exchange market maker means the inter-bank foreign exchange market member approved by National Foreign Exchange Bureau ,which undertakes the duty of providing buying and selling price to the other members when the transactions between RMB and the foreign currency are carried. The foreign exchange market maker system is the main mechanism of exchange market in the international foreign exchange market.Firstly, this thesis introduces the relevant basic theories of the market maker in foreign exchange, then analyzes and summaries the function of the market maker in the reform of the RMB exchange rate forming mechanism, including promoting the reform of the RMB exchange rate forming mechanism, improving the operational efficiency of the foreign exchange market and keeping the stability of RMB exchange rate, lightening the pressure of FX Intervention.Secondly, from the point of the behavior of the market maker, the model of information is established to analyze the decision-making process of the foreign exchange market maker. In the information model, the foreign exchange market maker in our country is divided into Band one dealer and Band two dealer, and the special status and influence of the central bank is stressed, which is the biggest market maker in fact during the reform of the RMB exchange rate. Thirdly, this thesis does research on the current situation and existing problem of the foreign exchange market maker system. It points out the operation characteristic of the market maker under the reform of the RMB Exchange Rate forming mechanism, and does analysis on foreign currency price mechanism and transaction mode in our country, stressing its operation principle: on the basis of original order-driven system, the quote-driven system and inquiring price function are added. Then the problems appearing since implementing the foreign exchange market maker system are analyzed.Finally, it puts forward the suggestion on the problems appearing since implementing the foreign exchange market maker system, and predicts that the trend of the mechanism of foreign exchange market of our country is the electronic manager system will be introduced, and the electronic manager provides collected order flow to the market maker who gives the request .