In 1994, The Rmb Exchange Rate System Reform Research

The choice of exchange rate is a major economic problem for a country,sinceChina’s reform and opening-up,the importance of exchange rate is becomingincreasing prominent,the RMB exchange rate system has undergone several majorchanges,of which the1994exchange rate reform is particularly prominent,it ends upChina’s ten years’dual exchange rate system,opened a new chapter in the choice ofRMB exchange rate system;with economic development and internal externalchanges in the enviroment,the nominala managed float,substantially the dollar pegsystem also caused some problems.The evalution on thin reform in academiccommunity is mixed.This paper attempts a comprehensive analysis of the RMBexchange rate reform in1994to a correct view of the exchange rate reform.This article first detailed exposition of the history of the changes of RMBexchange rate system before the1994exchange rate reform,the analysis of this phase change characteristics of the RMB exchange rate regime and exchangerate reform in1994,for historic reasons,and thus leads to the exchange rate reform in1994;followed by elaborate on the specific content of the1994exchange rate reform and the reform on economic development, it’s elaborated in three parts:the first part is before the1997Asian financial crisis; the second part is the outbreak of the Asian financial crisis; the third part is from the Asian financial crisis to2005.the subsequent1994exchange rate reform changed to make an objective evaluation of this reform is in line with China’s national conditions andeconomic development needs.Then,the theoretical basis of the relative Purchasing Power Parity1985to2004,the RMB exchange rate,the empirical analysis,conclusios and basically consistent with the foregoing analysis,that is the1994exchange rate reform is a successful one, but the RMB exchange rate formation mechanism is still not perfect,with the pressure of RMB appreciation.At the end ofthe full paper,the writer made a summary and a briefly described of the polic y implications based on the PPP.