The Order Of The Research Aboat RMB Interest Rate Market And Exchange Rate Market

The marketization of interest rate and exchange rate are the core content ofChina’s financial reform. Under the overall context of deepening the reform offinancial system, conducting a study on dynamic relationship between interest rateand exchange rate of RMB, and further investigating of the reform order aboat interestrate marketization and exchange rate marketization have great realistic meaning forproperly promoting financial reform. This thesis conducts a study on the contributionto interest rate fluctuation from exchange rate fluctuation and the contribution toexchange rate fluctuation from interest rate fluctuation using VAR model and variancedecomposition; and conducts another study on the causal relationship between RMBinterest rate and exchange rate using Granger causality analysis. Based on theseanalysis, we get the dynamic relationship between interest rate and exchange rate ofRMB. The study on three samples under each phase of market-based reform of RMBinterest rate and exchange rate shows that: RMB interest rate has a greater impact onexchange rate. Based on this research result, we obtain a reasonable sequence ofinterest rate marketization and exchange rate marketization. This thesis furtherexplores the feasibility of interest rate marketization. Basing on the reasonable andfeasibility study, a conclusion can be drawn: RMB interest rate marketization shouldbe prior to exchange rate marketization, the speed of RMB interest rate marketizationshould be accelerated in the process of China’s current financial reform.