Monetary Policy Independence Study Under The Rmb Exchange Rate Regime Change

China’s economic development is growing rapidly, GDP, foreign exchangereserves, import and export trade and so on among the highest in the world. Thesecharacteristics have shown that China already has the country’s economiccharacteristics, However, in such an environment, Independence of monetary policyin China has been repeatedly questioned. Monetary policy and exchange ratestability have been several clashes in the development process. Then the facts Is ittrue, as the people think that independence of monetary policy and exchange ratesystem in a dilemma realm and the independence of monetary policy has beengradually weakened? Or, as some scholars said that the independence of monetarypolicy remains. It is in this thinking to commence the writing of this article.According to the trilemma theory description of the fixed exchange rate system,the independence of monetary policy, free movement of capital between the threecan not coexist. On the basis of the trilemma, Yi Gang obtained that independence ofmonetary policy, fixed exchange rate regime, capital flows are not necessarily onlychoose one of two, more mutual constraints between the three objectives.Although there still exist the phenomenon of capital controls, china has beenthe relaxation of capital controls, Although the exchange rate regime is nominally amanaged floating exchange rate system, it is not necessarily the case. Therefore,analysis of China’s monetary policy independence should first analyze China’sexchange rate system is whether the official said a managed floating exchange ratesystem. In this paper, using the model in the fankle article to observe that RMBreference to a basket of currencies in the various currencies of the weight todetermine the state of the RMB exchange rate at each stage, and on the basis of thetraditional estimates of a basket of currencies, The introduction of the foreignexchange market pressure index variables to describe the pressure on the RMBexchange rate, thus determine the RMB exchange rate flexibility. If the weight of abasket of currencies in a currency of a very large, even equal to or more than one,And the RMB exchange rate flexibility is very small, Then we can determine theexchange rate regime during this period is the traditional peg; If a basket ofcurrencies in a currency of the right weight on the decline, Other currencies, theweight increased, and the RMB exchange rate flexibility, You can judge this periodthe exchange rate regime is managed floating exchange rate system. In1994.1-1997.6,2005.6-2008.9,2010.5-2011.10period, China implements amanaged floating exchange rate system, in1997.7-1998.12,1999.1-2005.6,2008.10-2010.5period, China is in fact traditionalpegged exchange rate system.Then we analysis of the monetary base and money multiplier endogeneity, Thatin the case of increasing foreign exchange reserves, the endogeneity of the monetarybase is in enhancing, And constitute the monetary multiplier of the main factors arethe subject of micro-economic behavior, rather than the active control of themonetary authorities, so the endogeneity of the money multiplier is also enhanced.Foreign exchange reserves and the amount of money with all levels to do theGranger causality test to determine whether monetary policy in China hasmaintained his independence. The results show that Chinese monetary policymaintained a good independent in1996.1-2011.10periodAt last, this text generalizes the conclusion from study and puts forwardcorresponding policy.