RMB Exchange Rate Changes In The Dynamic Impact Effect On The Liquidity And Inflation

Along with China’s rapid economic development and economic globalizationhave accelerated the pace of the RMB exchange rate issue has become a hot topic ofresearch at home and abroad. As a core economic variables of the home and abroad,the exchange rate fluctuation will affect the import and export trade, internationalcapital flows and consumer preferences, thereby bringing about changes in domesticmonetary liquidity and the price level. China is facing internal and external economicimbalances in the global financial crisis, the appreciation of the RMB expectedincreasing pressure on the context of the current managed floating exchange ratesystem the extent of impact on Chinese economic policy? RMB exchange rateappreciation can be an effective solution to our foreign exchange reserves, excessivedomestic inflation? The inflation rate fluctuations of the extent to which the excessdetermined by changes in exchange rates and liquidity? If we can be more clear,comprehensive and systematic understanding of these related issues and the exchangerate in real terms to improve Chinese macro-control mechanism. In order to establisha scientific and effective macro-control system, and expand the depth and breadth ofthe macro-control theoretical research has important theoretical significance forChina. Provide a certain reference to the future exchange rate policy-making; forimproving Chinese macro-control effects, sound and rapid economic development hasimportant practical significance.On the basis of the theory of open economy macroeconomics, summarizesprevious research experience, to build the inflation rate, monetary liquidity and thenominal exchange rate of RMB triples structural VAR model. The empirical resultsshow that in the short term, the nominal exchange rate movements through tradechannels domestic currency liquidity, resulting in the further increase of domesticinflation (or deflation). Nominal exchange rate changes on monetary liquidity andinflation rates have a dynamic impact effect, but the RMB exchange rate appreciationis not an effective strategy to stabilize the domestic inflation of this period. Chinaadopted a managed floating exchange rate system, the effectiveness of monetary policy is limited, the flow changes and the inflation rate of change of exchange ratefluctuations is limited, indicating that no significant effect of monetary policy on theforeign exchange market in China, at the same time on the devaluation of thecharacteristics of the external appreciation of the RMB rising domestic inflation rates,but the outside world on the expectation of RMB appreciation pressure.Finally, also pointed out that the future research directions, changes of RMBexchange rate and excess liquidity and inflationary effects of the relationship furtherin-depth analysis, concerned about the impact effect of exchange rate changes,strengthen macroeconomic policies for promoting economic developmentrecommendations.