Research On Exchange Market Pressure Of RMB

With the development of economic globalization,the economic connections between countries is closer and closer,exchange rate,as two countries' currencies nominally price parity,play the association part in world economy.At the same time, international currency regime has entered the floating rate era since the Breton Woods regime disassembly,exchange rate fluctuation becomes the constant state characteristic in the foreign exchange market.The study of RMB exchange market pressure not only helps us estimate the potential currency crisis,but also provides us an early warning mechanism by quantizing the degree of intervention and the exchange market depreciated and appreciated pressure.Therefore,the study of RMB exchange market pressure has important theoretical and practical meaning for economists,the governments,and enterprises and so on.This paper mainly studies exchange market pressure.First of all,it generally reviews relevant theories and studies.Then,chapter two reviews history of RMB exchange rate and analyzes RMB exchange rate regime and Chinese exchange rate policy.On the basis of that,adopting Weymark's definition of exchange market pressure and applying qualitative and quantitative analysis,this paper measures the exchange market pressure of RMB.Qualitative analysis includes the development of Chinese economics,the mechanisms of short-term capital movements and the international pressure on China.Quantitative analysis adopts ADF and Two Stage Least Square.This paper chooses open economic model which is applicable in China and by Two Stage Least Square estimates its structural parameter,on the basis of which calculates the exchange market pressure faced by RMB in the years between 1996 and 2008 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 up valuating 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 correspondent suggestions to remove the exchange market pressure of RMB.