Analysis And Improvement Of China's Current Exchange Rate System Is Recommended

In today's world, with economic development, economicglobalization is an irreversible trend, the exchange rate as an openeconomy adjust to external economic variables at the center, the correctchoice of exchange rate regime is very important for any country,different countries should be based on its own national conditions atdifferent times and appropriately adjust its exchange rate regime choices.Inappropriate choice of exchange rate system will directly endanger thesecurity of a country's economic and financial stability. The full text isdivided into four parts : its structure and the main content is as follows :Chapter One, firstly, the main factor affecting the exchange ratesystem such as economies of scale, economic openness, inflation andtrade concentration analysis;Secondly, the renminbi exchange ratesystem since 1994 as a starting point the evolution on the 1994-2005exchange rate system gradually evolving process.Chapter Two, through the revelation of our changing economicenvironment, raised as a result of these changes, such as expanding thesize of the economy, balance of payments surplus continued, such asforeign exchange reserves increased in the three major challenges of theRMB exchange rate system. Which found the existing exchange ratesystem and the economic environment is not adaptation.Chapter Three, the current exchange rate from three aspects thatneed improvement : The actual operating system of exchange rates cannot fully reflect the supply and demand of foreign exchange markets,there is an urgent need to establish to reflect market supply and demandof foreign exchange rate formation mechanism;The existing long-terminflexible exchange rate regime, exchange rate fluctuations is too narrowand can not effectively resolve and prevent international exchange ratefluctuations in the exchange rate have risks;Long-term stability of theRMB exchange rate-risk-free arbitrage opportunities increased, increasethe probability of financial crisis. With the further opening up of China'seconomic and financial, should be gradually moved toward genuinefloating exchange rate system.Chapter Four, with the problems on the current exchange rate systemreform has made specific policy recommendations. First, it shouldincrease the volatility and improve our foreign exchange markets;Secondly, the further easing of exchange controls and ease theappreciation pressure;Once again, foreign exchange risk early warningmechanism should be established to ensure the safety of foreign exchangereserves;Finally, as soon as the corresponding laws and regulations of theExchange Proposals.