Analysis On Mechanism And Empirical Of Foreign Exchange System To M₂/GDP In China

Since the foreign exchange system reformed in 1994,China’s current account and capital account have continued to be "double surplus",and our foreign exchange reserves also increased significantly.The increase in foreign exchange reserves has caused the excessive Position for Forex Purchase.And the Position for Forex Purchase has brought a great impact on China’s money supply and made it hader for the central bank to control money supply.The phenomena shows that the existing foreign exchange system is not suitable for the country’s economic and financial development,it has many disadvantages.In this paper,we use normative analysis,empirical analysis,comparative research and qualitative analysis and quantitative analysis methods to study.Through above methods, we analyse the impact of the exchange rate regime and exchange settlement and sales system on the M2/GDP.First,after detailed classification and grooming senior research results, we have a understanding of the current situation of researches related to M2/GDP, and find the limitations of the study and the problems need to break; secondly, describe the history of the exchange rate regime reform and exchange settlement and sales system reform,find that every reform movement will give impact to M2,especially fluctuations that happened after 1994;On this basis,we analyze pathways and influence principles of the exchange rate and exchange settlement and sales system on M2 respectively,and we got the result that the exchange rate and exchange settlement and sales system influence the M2 mainly through the influence of the Position for Forex Purchase;finally,we apply quarter data of the Position for Forex Purchase and money supply from People’s Bank of China from1994 to 2013,through the empirical analysis,we got that whether long-term or short-term,China’s Position for Forex Purchase have positive correlation to money supply.Of course,the analysis also further validates the impact of China’s foreign exchange system on the money supply.Then according to the research results,we gave some measures and recommendations to improve the foreign exchange market and foreign exchange system in the final chapter.The main innovative point of this thesis has two aspects.The first point:combining the exchange rate system and exchange settlement and sales systemto study effects of foreign exchange system on M2/GDP.The second point:through researching the effect of exchange rate system and exchange settlement and sales system on M2/GDP,we knew the Position for Forex Purchase is the main reason of causing excessive M2.We take the Position for Forex Purchase as a bridge to study the the effect of foreign exchange system on M2/GDP.In fact,the Position for Forex Purchase has become the main channel of moeny supply.