Rmb Nominal Exchange Rate Viscosity Of The Reasons For Its Economic Effects Of Research

Since the exchange rate system reform in 2005, the central parity rate for the RMB versus the US dollar hits new high unceasingly and the tendency towards continuous rise in value is obvious. However, during a period of time before the RMB rose its value (1995-2005), there was another fact that the RMB exchange rate had an over-stable state. We define this over-stability of RMB nominal exchange rate as the RMB nominal exchange rate stickiness. The essay just launched the discussion around the reason and influence of RMB nominal exchange rate stickiness and made the reply to these questions theoretically with calm and the science attitude.The essay carried on its way with the Western exchange rate decision theory as the foundation to the exchange rate theory and further explained the applicability of Western exchange rate decision theory in our country, thus proposed the RMB exchange rate decision theory with the special hypothesized conditions. In researching RMB equilibrium exchange rate, we proposed the conception of RMB nominal exchange rate stickiness and carried on an empirical research to it with the data. Further, based on the fundamental equilibrium nominal exchange rate model, we gave the new hypothesized condition, proposed nominal exchange rate equilibrium model with the exchange rate system instability and the adjustment cost and explained the RMB equilibrium exchange rate stickiness. The research findings indicated that under the conditions of the exchange rate system instability and the dynamic inconsistency, extremely high RMB exchange rate adjustment cost and the relatively small exchange rate system adjustment cost were key factors to explain the RMB exchange rate stickiness. Finally, using related data froml995 to 2005, the essay carried on a quantitative analysis to the economic effect under the condition of RMB nominal exchange rate stickiness. The regression result indicated that under the condition of RMB nominal exchange rate stickiness, the actual effective exchange rate and the export, the import and FDI assume to be negative correlated and present positive correlation to the balance of international trade.At the same time, the essay also gave four policies recommendations, including increasing the flexibility of RMB exchange rate to realize the managed floating of RMB in the real sense; gradually consummating the foreign exchange market to improve the formation mechanism of the RMB exchange rate; gradually improving the exchangeability of RMB capital project to realize the free float and the internationalization of RMB; and developing and perfecting foreign exchange market to hedge the exchange rate risk by using the derivative financial instruments.