Studies On Rmb Currency Basket Under Financial Crisis

The international economic situation and China's foreign trade patterns have undergone some changes since the Financial Crisis. The government did not announced currencies and weights of the basket after exchange system reformed in July 2005. The paper finds that the international monetary system will change with the depreciation of the dollar and the international status of currency will have an increasing impact on exchange rate, so the currency's international status could be considered factors in the building of RMB basket. This article uses the total economy, the total trade volume and level of development of financial markets and other factors that determine the currency's international status, to explore the composition of the RMB basket. Trade-based basket of currencies were compared.The first chapter includes analysis of the exchange rate system reform, the changes of the international economic situation and the domestic foreign trade pattern. Then it introduces the situation of the foreign currency basket and gives the idea of this research and innovation.Chapter II uses trade quantity and the currency's international status to construct RMB currency basket. It chooses currency and determine its weight according to the important relationship between trade and the currency's international status.Chapter III is an empirical analysis part. First, it verifies the existence of the currency basket constructed cointegration, then it analyses the applicability, the stability and the degree of deviation of the two currency basket. Through the comparing, the paper considers the currency's international status is better than the trade quantity for the building of RMB basket. Finally, it also verifies the interaction between the basket exchange rate and market exchange, the relationship between them could be used to predict. Chapter IV is the conclusion and policy recommendations. The paper considers the basket building by international status is more comprehensive than trade volume. It can simulate market exchange rate better and be referenced to level off the exchange rate. China should change the economic development model, principle of autonomy of monetary policy, adjust policy to introduce foreign capital, rational use of foreign currency assets and continue to develop our financial markets.This paper believes that the international status of the currency impact on a country's currency will become increasingly important. so you can consider it as a base of RMB currency basket. We use it to build a better basket of currencies compared to the trade. It is more stability and less departure of the market exchange rate. Also it is proved there is a good interaction between them through the Granger model. ?...