The Research Of The Interrelation Between Real Rmb Exchange And Stock Market Price Index Fluctuations

The stock price index is "the barometer" of the national economy, can reflect the slight change of the entity economy; but the changes of RMB rate reflects the change in its international purchasing powers, also reflects the change of the economy fundamental facet which controls the purchasing power of RMB. the Stock market price and the exchange rate are the price of the two main financial sub-market. Inspecting the interactive relations between them is of important practice significance. All previous world financial crisis indicated that the fluctuation of exchange rate has close connection with the Stock market price's fluctuation. The People's Bank of China announced that our country started to implement floating exchange rate system which is based on the supply and demand of market referring to a basket monetary to make adjustment and management on July 21,2005. This means that in the future, the change of RMB rate will be more elastic and its changing scope will be gradually expanded. Today, the exchange rate of RMB to US dollar increases continuously, the price scale of China Stock market price strengthens, the number of listed companies and the capital stock increases. Moreover, along with elastic enlargement of RMB rate and the deepen of stoke power allocation reform, the linkage between RMB rate and the Stock market price will be more obvious, and this weak topic will gain more attention. The article research on the relations between RMB rate and Chinese Stock market price index is under this background, attempting to clarify if the fluctuation of exchange rate would cause the Stock market price's fluctuation, analyzing the connected reason between exchange rate and the Stock market price fluctuations, and proposing relative policies on how to maintain stable of the foreign exchange market and the Stock market.This article briefly introduces the research goal and significance at first, reviews the research viewpoint and method of both domestic and foreign experts, providing theory reference to this article. In the empirical analysis, according to the exchange rate data and the stock price index data, thorough relative analysis of the relationship between real RMB exchange rate and Stock market fluctuation relations via VAR model concludes that the two. Also, the article concludes the two existing relevance in long-term through the granger causality test and the cointegration test. At the same time, it concludes that the fluctuation of RMB is due to the exchange market changing index pointing to Grainger in one direction. On the basis of detailed conclusions, the article proposes the policies on developing foreign exchange market and Stock market of our country, hoping that will make our foreign exchange market and the Stock market more perfect.