Analysis Impact Factors Of RMB Appreciation And The Policy Recommendations Of Exchange Rate Reform

People's Bank of China announced to carry out the reform of RMB exchange rate formation mechanism on July 21, 2005,China started to carry out a floating exchange rate managed system which is based on market supply and demand, referenced to a basket of currencies.The RMB rate no longer observed closely sole US dollar, formed the richer elastic RMB rate mechanism. Since October, 2004, US dollar has stabilized to the RMB rate in 8. 2765 levels. But after July, 2005, This kind observes closely the condition is to destroyed, RMB exchange rate has shown a slight appreciation trend. After more than three years time, RMB exchange rate has risen to near 6.83.RMB appreciation has brought a lot of disadvantageous effects to China's economy,for example, to weaken China's export growth,to be harmful to attracting foreign investment in China and to increase the employment pressure.Then,which factors influence the RMB exchange rate?How do these factors influence the RMB exchange rate? We should analyze the reasons for the impact of the RMB exchange rate in order to take targeted measures to address.This article focus on the important factors effected RMB exchange rate,studies on a theoretical level from economic growth, balance of payments, interest rates, inflation and so on. To analyze how they affect the RMB exchange rate nothing omitted. Retrospective the the transmission mechanism of economic factors which effects the pressure of the RMB appreciation. In addition, the international community that the United States and Japan as the main force exerts great external pressure on appreciation of the RMB;China's exchange rate mechanism unreasonable brings about long-term imbalance between supply and demand of foreign exchange is the institutional factors of revaluation of the RMB, is also a direct cause the appreciation of RMB in recent years.On the basis of research in the major factors effected RMB exchange rate changes, analyzing the existing problems on the basket of currencies system at this stage, also Making a number of policy recommendations on China's exchange rate system reform. Including speeding up the process of market interest rates; to reduce friction in Sino-US economic and trade;to control the size of the foreign exchange reservesand promote the rational use; to improve supervision of exchange and accounting,to set up the whole system to monitor capital flows of foreign exchange,promoting the reform of RMB exchange rate system.