The Choice Of Rmb Exchange Rate Policy, The Southeast Asian Financial Crisis

The subject matter of this paper is concerned with the adoption of the current Renminbi exchange rate policy under the attack of Southwest Asia Financial Crisis . It includes: How the Renminbi exchange rate regime is arranged ; Whether the current Renminbi exchange rate level is rational ; What is the cost and benefit of the exchange rate devaluation policy ; How to choose and manage Renminbi exchange rate policy. Through the studies of those questions , I have had a further recognition of the Renminbi exchange rate and exchange rate policy . Besides, This is also a process of my further study of economic theory and methods.About those questions, I have consulted many documents concerned. Based on the absorption of each point of view critically , I try to understand those questions from different angle and establish my own theoretical framework . The paper is divided into three chapters. Chapter one is the study of the Renminbi exchange rate regime arrangement . Firstly, I study the relation between the Thailand Financial Crisis and the pegging exchange rate regime . I get the conclusion that the adoption of exchange rate regime must concern many factors, such as the time , developing phase, and economic conditions . The pegging exchange rate regime had contributed to the growing international trade and glorious economy situation during the early days of the Thailand economic reform. But with the deepening of globalization and liberalization, the pegging exchange rate regime have brought about great financial risks and also promoted the breakout of Financial Crisis on the condition of the opening capital account . Secondly, I study the relation between the current international monetary systems and the Financial Crisis . I think that the main part of these systems is the flexible exchange rate regime. This regime have produced unequal and unstable factors to the world economy. The developing country is in unfavorable position of this regime. Furthermore, The coordination system is not perfect and vulnerable to the attack of the Financial Crisis. The unceasing breakout of the Financial Crisis calls for the reform of the international monetary systems. Finally, I discuss the virtues and shortcomings of the current Renminbi exchange rate regime . I find out that the market basis for the current Renminbi exchange rate regime has been strengthened and the determination of Renminbi exchange rate level has concerned many market factors . However, we must note that there are distortion signals of foreign exchange supplying and demanding . And the current Renmibi exchange rate regime is more a pegging one than a floating one. With the liberalization of capital control , the Renminbi exchange rate regime may be more and more directed by the market change and turn into a " target zone " exchange rate regime in the future.Chapter two is the study of the determination of the current Renminbi exchange rate . It has three sections. In section one, I point out that the break out of the Financial Crisis has brought about Renminbi exchange rate devaluation pressure , and the devaluation expectation had become an important factor of which influence the Remminbi exchange rate change. I discuss the five sources of the current Renminbi devaluation expectations : the worries about current account depression, the fear of the capital and financial account deficit , the bad effect on the Renminbi exchange rate of the going down nominal interest level, the problems of national macroeconomics and the new phenomenon in the exchange rate black market. In section two, I study the relation between the change of nominal Renminbi exchange rate and basic macroeconomics targets. The major macroeconomics targets which I choose are the balance of payment, the real interest rate , the GDP increasing rate , the monetary provision increasing rate , the labor product rate. I find out that most of the basic macroeconomics targets support the stability of the current Renminbi exchange r...