Analysis Of The Change Of RMB Exchange Rate Effect On Commodity Prices In China

The exchange rate for both countries or the common people’s economic life is avery important economic variables, along with our country reform and open policy isaccelerating the process of economic globalization and increasingly. The exchange rateis greater regardless of a country or economic and trade exchanges between nations andinfluence, has gradually become an important index to reflect to the macro economicsituation is good or bad. And we found in the adjustment of exchange rate and othereconomic data has changed, especially in the domestic price level, and the domesticprice level changes with the national life is inseparable.Along with the global economic integration deepens, open degree of real economygradually increased, the exchange rate and the domestic price as an open economymonetary external value and internal value of, there is a close relation between the two.America economist Paul Krugman think, exchange rate fluctuations lead to thedevaluation of national inflation, appreciation of national deflation. Since our countrysince the July21,2005implementation of the exchange rate reform, the RMBappreciation rate speeds up gradually. The RMB exchange rate against the dollar hitrecord highs, to December31,2012the RMB against the US dollar exchange rate of6.2855, the cumulative appreciation of more than31.2%. At the same time, thecorresponding is, the domestic price level is also showing a strong momentum, the2008CPI rose5.9%, first quarter is up8%. In the second half of2010since the price levelrise unabated, the highest value in November reached5.1%,2011CPI rose4.1%,2012CPI rose1.7%. We found that, in the relationship between China’s exchange rate andprice seems to be related to the classical theory, but there are some intrinsic linkagerelationship. So, explore the conduction path between exchange rate and price level andare becoming more and more important. Through the understanding and mastering thebetween the exchange rate and price level, we can better control the price level in acountry at the same time, the exchange rate of the macroeconomic regulation andcontrol means, the healthy development of the national economy has an extremelyimportant significance.In this paper, on the basis of the relationship between the large number of exchangerate and the price level of literature, the main factors of influencing the consumer priceindex: RMB nominal effective exchange rate, money supply, import price index, GDP,the seven day interbank lending rate by using multiple linear regression in econometricsmodel to the empirical study, that there is a negative correlation between RMB nominaleffective exchange rate and price level, and the money supply, import price index, GDPand the seven day interbank lending rate to the price level is positive correlationbetween five variables, namely the rise will increase of prices. Cause the price risepositive effect was larger than the negative effect, so the influence of various factorswill make the domestic prices, it will make the RMB showed external appreciation butinternal devaluation phenomenon.