The Research On The Influence Factors Of RMB Exchange Rate's Fluctuations

In recent years, very deep change happened in the international finance field. The world economy is displaying globalization trend. Exchange rate, as a bridge one contacting a country with each other nations, is playing the more and more important role in international finance field. With the fact that China has joined the WTO, China and the rest of the world will be more closely. Goods, capital and labor mobility become more frequent. RMB exchange rate as China's foreign economic exchanges with the currency price indicators have begun to public attention.Since the founding of New China, after several stages of development, RMB rate system changes from a fixed exchange rate gradually toward to a managed float. In fixed exchange rate system period, the RMB exchange rate fluctuations are adapt to the current economic policy. Various factors on the exchange rate of RMB have been concealed. As China's exchange rate system reform, RMB exchange rate would eventually go to the market. Affecting changes in RMB exchange rate factors become more important. Therefore, the research on the influence factors of RMB exchange will become more important.This paper reveals various factors on the impact of RMB exchange rate mechanism proceed to the management authorities to take the necessary economic measures to make RMB exchange rate at a reasonable and balanced level slight fluctuations provide the basis in order to safeguard China's steady economic growth.This paper firstly describes the background of topics and the research status. The second part introduces the definition of RMB exchange rate since the founding of historical change; and the simple overview of the impact of exchange rate.Part III to Part V is the core thesis. The paper discusses the factors which influence RMB exchange rate from real economic factors, currency factors and psychological expectation analysis.Part III and Part IV research the actual economic factors of economic growth, inflation, the balance of trade and currency factors capital projects, monetary policy, interest rates, foreign exchange reserves and international hot money. Part V is a separate part to discuss how the psychological expectations to impact RMB exchange rate's fluctuations. Firstly the paper summarizes the theory of psychological expectation impact on the exchange rate. Then it elaborates the process of psychological expectation impact on exchange rate. Moreover, the text analyzes the formation of the desired unilateralism expectation of RMB exchange rate and the damage of fluctuations in RMB exchange rate caused by the desired unilateralism expectation.The final part of this paper gives some policy recommendations according to the previous analysis.