The Research On Currency Mismatch Problem Of China

As an economic phenomenon, currency mismatch refers to a situation that an economic entity's net assets or net income are sensitive to the changes of the exchange rate, when its assets / liabilities or revenues / expenditures are denominated in different currencies. It is a universal problem to developing countries, when they are integrating into the global economic system. China is also facing this difficult problem, which has existed a long time, but until recently has been extensively concerned by theorists. The reason for this is that, before the exchange rate system reform in 2005, China actually implemented the fixed exchange rate system, the fixed exchange rate made the currency mismatch risk not appearing.When currency mismatch has been accumulated so much degree, it will influence stability of financial system, effectiveness of monetary policy, flexibility of exchange rate policy, investment and output in any country. Because currency mismatch will cause tremendous harm to the macroeconomic and the currency mismatch risk will be from potential to reality after the exchange rate system reform, researching this problem comprehensively and systematicly will be urgent. Yet research on this problem in our country is at the initial stage. This article, researched the currency mismatch stock of national-level, used both the theoretical analysis and the empirical analysis, both the qualitative analysis and the quantitative analysis. First, using the theoretical analysis method, summarized the research situation of currency mismatch, from three aspects: the connotation, the cause, and the measure methods. On the one hand, the basic theory of currency mismatch will be showed to the readers systematicly and intuitively, On the other hand also made up the theoretical preparation for the depth discussion below. On this basis, estimated the currency mismatch degree of China, through the aggregate effective currency mismatch index introduced by Goldstein and Turner, analyzed the characteristics and the economic impact according to the reality and situation of currency mismatch in China. Do this like that will truly present the currency mismatch problem situation of China. Then qualitatively studied the influencing factors of currency mismatch in China, and used the Johansen cointegration test method based on vector autoregression model, in order to inspect the long-term relation between the currency mismatch and its influencing factors. The result of positive test indicated that: choice of exchange rate regime is the most important influencing factor to currency mismatch, followed is the rate of economic growth, then is the level of development of the financial market. Finally, according to the analysis of the text before, raised the policy recommendations to manage and control currency mismatch, including perfecting the managed floating exchange rate system, implementing the sound macroeconomic policies, improving the symmetry of foreign-related economic policies and optimizing the export structure, vigorously developing the domestic financial market, strengthing management of external debt and foreign exchange reserves, establishing a supervisory system against currency mismatch. At the same time, lessoning experience from Japan, avoids our country also falling into the trap of liquidity. This series of policy recommendations will also play an important role to smoothly push forward reform of the exchange rate formation mechanism and ensure economic and financial security in China.