The Impact Of The Fluctuations Of RMB Exchange Rate On The Import And Export Of Hubei Province

Exchange rate, concerning as a comprehensive criteria of price, correlates the international prices with the domestic ones through the function of implementing prices in both international finance and international trade activities, thus it becomes an essential lever in manipulating a country’s trades’ profits and expenses. The fluctuations of exchange rate cast a profound influence over a country’s external trade balance and domestic economic development. With the development of economic globalization and the deepening trend of China’s open-up and reform policy, the influence of the exchange rate of RMB is increasingly affecting China’s economy.Hubei province, as a strategic spot of China’s central rising policies, its eternal trade is an organic part of Hubei province’s local economy, whose stable and steady development is profitable to the leap-forward development of Hubei’s economy. Therefore, this paper tries to adopt the related theories and methods of exchange rate fluctuation’s effect on economy, setting Hubei province as an example, from the perspective of trade flow and trade structure, analyses the effects of changing exchange rate’s influence over the import and export trade of Hubei province on both levels of theory and practice.First, this paper reviews the literature resources and theories relating to the topic of exchange rate’s fluctuations’ effect on import and export trade. On this basis, it constructs the structure of analysis.Second, due to the structure, with the comprehension of qualitative and quantitative, this paper respectively studies the effects RMB’s exchange rate has on the trade flow and the structure of trade. The result indicates that the influence is rather minimal in terms of exchange rate’s fluctuations over the trade flow of Hubei province. Hubei’s total amount of foreign trade is closely related to the local GDP figure. A steady growth of RMB’s value is beneficial to the optimistic improvement of the import and export trade structure of Hubei as well as the regional balanced development.Finally, according to the analysis of these results, this paper draws on some reasonable suggestions to this issue.