The Impact Facotr Of RMB Exchange Rate: An Analysis On The Model Of Comprehensive Effects

A number of substantial changes have occurred in the realm of international finance since the 1980s. Many topics, such as exchange rate, attract wide attention. Being the currency price index between China and other countries, RMB exchange rate has a close relationship with other economic factors, and becomes the current hotspot in domestic finance. On the basis of review on a large number of domestic and foreign literatures, this manuscript analyzes the status quo of domestic and international factors that influenced RMB exchange rate. We believe that the major economic factors have a great impact on the fluctuation of RMB exchange rate, such as international balance of payment, general domestic production (GDP), currency inflation, foreign exchange reserve, domestic and foreign spreads, policy intervention, psychological expectation from the public, political factors and RMB-to-nondollar rate and so on. By constructing the mathmatical model and empirical analysis, we showed that RMB exchange rate may be jointly influenced by the following factors, GDP, foreign exchange reserve, value of import and export, monetary policy, interest rate policy, currency inflation and so on. The RMB exchange rate will fluctuate with the change of anyone of the above factors.Based on the comprehensive effect of exchange rate model, this work make an empirical analysis on the factors that influenced the RMB exchange rate. Simultaneously, we also analyzed the dynamic processes of alterations of these factors in the samples. We tried to find the underlying causes and potential munipulators that result in the appreciations and the fluctuations of RMB in recent years. This study may contribute to our understanding towards the domestic policies and regulations on the currency exhcnages by the admnistration bureas.