Research On RMB Exchange Rate Decision Model From The Perspective Of Behavioral Finance

It is difficult for traditional exchange rate theories to explain some strange phenomina in the exchange rate market,such as“disconnet puzzle"“volatility clustering “excess volatility",for these theories do not take into account the heterogenenous expectation of the traders. Heterogenenous expectation can be explained by behavioral finance theory.This passage tries to extropolate the formation mechanism of the heterogenenous expectation and how it shed light on the exchange rate.This passage has done the research on the features of the expection in the exhcange rate market in China,and find there are three features:(1)In different periods the expectation of RMB has different characteristics;(2)The expectaion of RMB has heterogeniety and it englarges as the market plays a more imporatant role in the decision of RMB exchange rate;(3)The intervention of central bank has three channels to affect the expectation,and in the end,has influence on the exchange rate,ie,the channel through customers,the channel through ordinary banks and the channel through market maker.empirical study is tried in the last second part of this paper.the intervention of central bank and the expectation of fundamentalist contribute to reduce the fluatuation of exchange rate.Nowdays, we still have to deepen the reform of the formation mechanism of exchange rate,and improve the efficency of the fanancial market.