Rmb Exchange Rate Regime Choice

Nowadays, the regime of RMB exchange rate has been discussed more and more broadly and frequently. The main purpose of this dissertation is to analyze the main disadvantages of the fixed with dollar regime as well as to demonstrate that Managed floating with basket money is the optimized exchange rate regime for China in the future.The main content of the whole paper is structured as follows:Chapter 1, summarizes the theory about how to choose exhange rate regime, and then propose a new hypothesis. I summarized the whole theory of this field both abroad and domestic. I give a new hypothesis of the determine of exchange rate regime, that is " Under specified goal function, with the influence of different kinds of community, the government choose the best exchange rate regime from the possible space limited by the reality factors."Chapter 2, study the experience of international exchange rate regime, and learn some lessons from the study, meanwhile try to support the hypothesis. Firstly, I use some statistic data of international exchange rate regime; Secondly, I use some successful case to and some failed case to verify the assumed theory as well as to draw some useful experience from them. Chapter 3, analyze the advantage and disadvantage of the fixed with dollar exchange rate regime, especially the disadvantage. I use plenty of data to demonstrate the disadvantages of fixed with dollar exchange rate. There are several disadvantages: the value of exchange rate deviate from the equivalent value, the monetary policy is out of function, inducing the imbalance of the economy, the regime cannot last long term, the conclusion is that we really need to abandon this regime. Chapter 4, apply the verified hypothesis to analyze Chinese regime reform to get some useful results, we can already draw the conclusion that we should change from fixed with dollar exchange rate regime to managed floating with basket money regime. I give some operating advice on this new regime. Then I give some advice on how to enhance the RMB exchange rate forming mechanism.