Exchange Rate Policy Reserch Between China And U.s. As The Level Of Oil Price

Exchange rate policy game is that U.S. requires China to accelerate the appreciation of RMB by using the dollar hegemony. But China tends to control the pace of appreciation of RMB in order to reduce the negative impact on the domestic export trade and overall economic development. This paper focuses on the role of oil price in exchange rate policy game between China and U.S. Then makes appropriate recommendations on our energy policies and exchange rate policy.In the empirical part, this paper selects the monthly datas of WTI oil futures prices, the U.S. dollar index and the effective exchange rate of RMB against the U.S. in 2005-2009. Then according to the logistic regression model, article analyzes the impacts of dollar index on oil prices and oil prices on the impact of the RMB exchange rate. On this based, the transmission mechanism of depreciation of the dollar led to RMB appreciation is showed in the end.Empirical research demonstrates that:The dollar index has significant impact on oil price, and it is one of the main causes of oil price volatility; oil imports oil prices have significant impacts on RMB exchange rate; In the exchange rate policy game between China and U.S., oil prices is an important intermediate variable which leading to more significant appreciation of the RMB. In the end, according to the conclusion, this paper presents proposals of breaking the dollar hegemony, accelerating the establishment of China's oil futures market , improving the financial system and actively seeking for RMB settled in oil transactions.