Research On The Transformation Of Exchange Rate Regime Based On The Equilibrium Exchange Rate Theory

Since 1990s, transformation of exchange rate regime concomitance with currency crises has led to international financial system turbulence. Free international monetary system enhances freedom choice of exchange rate regime, on the other hand, it leads to uncertainty of exchange rate regime choice. Exchange rate regime is important part of financial regime and extending path from domestic finance to international finance. The choice of exchange rate regime influences sustainable and balanced development of national economy. Whereas a series of lessons of financial crises, how to exit actual exchange rate regime and accomplishing transformation of exchange rate regime are new field of study on international exchange rate regime. Choice of exchange rate regime is a key to avoid currency crises for developing and transition countries. Since reform and open, step to global economic system of China has been accelerated, and RMB exchange rate has been key factors affecting economy development of China. On July 21,2005 the People's Bank of China announced that starting from July 21,2005,China will reform the exchange rate regime by moving into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. The New reform redefined the adjustment of RMB exchange rate in the future, which takes an important step towards transformation of exchange rate regime from"fixed"to"floating".This paper researches transformation of exchange rate regime from efficiency, equilibrium and credibility and analyses the exit strategies. According to the research ago, there were plenty of studies about exchange rate regime and equilibrium exchange rate. However, the study about correlation between them was bits and pieces, especially from the point of efficiency, and study on transformation of exchange rate regime from equilibrium faith was even rare. This paper analyses exchange rate regime from efficiency faith and equilibrium faith, this is to say that efficient exchange rate regime makes main body having different benefit find equilibrium point to realize the max-benefit, and it needs a equilibrium price, namely equilibrium exchange rate to attain equilibrium of interior and exterior economy and promote economic growth. According to above idea, this paper studies the hidden trouble and improving way from the perspective of the arrangement of regime and policy, with transformation of exchange rate regime and their coordination as a main logic theme, to put forward advice to the reform of RMB exchange rate regime.