A Study On The Problem Of Currency Substitution In China

Currency Substitution means that when residents in one country lose confidence in currency stability or domestic asset income rates are relatively low,large scale currency substitution takes place,which makes foreign currencies replace domestic currency completely or partly in value reservation,transaction medium,value standard and so on. Currency substitution rate in China is relatively low with less flexible RMB exchange rate, less developed domestic financial market and lack of full convertibility of RMB on the capital account.The currency substitution phenomenon which in the 1970s-1980s occurred in Latin American nations' dollarize phenomenon,1980s-90s the former Soviet Union and the Eastern European country presented the dollarize phenomenon,some small,the economical degree of openness high emerging market country and the area appears.The currency substitution will have various influences to a country economy;the serious currency substitution can vacillate the people to a country currency confidence,will harass this country finance order,and will cause the financial crisis.This urges the people to study the currency substitution question,guards against the risk which the currency substitution brings.With our special economic mechanism,we have to do theoretical and empirical research about currency substitution by ourselves,rather than simply use western theory.This article unifies our country's actual situation and makes use of econometrics to do some empirical researches on our nation's currency substitution problem,based on carefully studying western and Chinese related articles and papers,and draws the following conclusion:1.GDP's logarithm,domestic currency and foreign currency interest rate difference,the RMB exchange rate level,the inflation rate are the reasons that currency substitution rate changes,and through cooperates the entire examination to obtain these factors and our country currency substitution rate has the long-term relations;2. looking from the measurement equation,GDP logarithm,domestic currency and foreign currency interest rate difference reversely influent the currency substitution rate,the RMB exchange rate level,the inflation rate and the currency substitution rate become the forward relations;3.looking from the return result,our country's currency substitution degree is been mostly influenced by the exchange rate mobility rate,except that domestic currency and foreign currency interest rate difference is also the important effect factors.