On The Interaction Of Exchange Rate,Exchange Rate Expectation And RMB Internationalization

The level of currency internationalization of a country is an important indicator of how much that country participates in world economy,and a deep internationalization of its currency will help this country in its economic activities in world economy.With the continuous growth of China's economic output,its international trade volume and investment cross its border,not only RMB internationalization has received more and more attention from academic,governmental and industrial levels,but also cross-border settlement in RMB is used in more regions and its amount is continuously growing.Since March 2014,the loosening of policy that allow RMB exchange rate volatility ina certain range to make the relationship between exchange rate fluctuations and RMB internationalization much closer.On December 1st,2015,the IMF announced that allow RMB join in the SDR,after into the basket,the weight of RMB is 10.92%,beyond the pound and the yen,behind the dollar and the euro.Since the RMB join in the SDR,this event makes the RMB internationalization once again become a hot topic.However,it still exists the problem in the process of RMB internationalization that the unbalanced development of cross-border trade import and export,the unbalanced development of current account currency inflows and outflows,and the fluctuations of the RMB exchange rate,exchange rate expectations that makes investors lose confidence in the RMB.It's the serious influence for the sustainable development of the RMB internationalization.Therefore,the research on the mutual influence relationship between exchange rate,exchange rate expectations and RMB internationalization is importance and urgency,this is why I choice this topic for research.This article first elaborated the background and research significance of writing this article,combing the literature that research the RMB internationalization and the influence of exchange rate reflect to RMB internationalization,summarized the related theory that exchange rate factors influence the currency internationalization,especially summarized the theory that include the mutual effect mechanism between exchange rate factors and currency internationalization,settlement exchange rate choice theory and exchange rate determination theory,to find out the breakthrough point of this paper study and analysis foundation for later.Then summary the dollar,euro,yen these three strong world currency internationalization development,reveals the currency internationalization process and its close links with exchange rate,exchange rate expectations and provides the valuable experience for the development of RMB internationalization and the study of the interaction of exchange rate,exchange rate expectations and RMB internationalization.Then,this article through introduce the present situation of RMB internationalization development and the recent development trend of the RMB exchange rate,founding the problems existing in the process of RMB internationalization development,and analyzes the reasons.On the basis of the above analysis,this article research the mutual influence between the exchange rate,exchange rate expectations and RMB internationalization for empirical analysis.First of all,using the relevant theories of above conclusion,analyzing the mutual effect mechanism between the exchange rate,exchange rate expectations and RMB internationalization,and then,through the establishment of the VAR model,unit root test,impulse analysis,variance analysis method to find out the mutual influence relationship of exchange rate,exchange rate expectations and RMB internationalization.This article have the innovative points as below.Firstly,the research on the mutual effect of exchange rate,exchange rate expectations and RMB internationalization.On the one hand,literature always research on RMB internationalization in the period of the appreciation of the RMB exchange rate,but in this article,the research on the relationship of exchange rate,exchange rate expectations and RMB internationalization include both appreciation and depreciation period,so we can more comprehensive to research on the mutual effect of exchange rate,exchange rate expectations and RMB internationalization.On the other hand,literature always research on exchange rate affect RMB internationalization that is a one-way relationship research,but the research on the relationship between exchange rate,exchange rate expectations and RMB internationalization is importance and urgency for the persistent depreciation trend and negative expectations of RMB exchange rate,this article make up for the inadequacy of the study of this field.Second,reviewing the history of the world's major currency internationalization process,summed up the experience of currency internationalization can be used for reference.This article refer to the dollar,euro,yen these three world currency internationalization development course,present situation and its mutual influence relationship with exchange rate factors,thus it is concluded that our country should seize the opportunity to actively promote the development of RMB to Asian regional and also need to control the risk of the domestic economic and financial aspects.It helps to analysis the mutual influence relationship of RMB exchange rate,exchange rate expectations and RMB internationalization.Third,there are results from empirical research as below.First of all,the exchange rate expectations pay the dominant position to the affect for exchange rate and RMB internationalization,the RMB exchange rate appreciation expectation can play an positive influence on the RMB payment of the world in the long term and also can promote the appreciation of the RMB for a long time.Second,the RMB real effective exchange rate has the general explanation for RMB payment of the world,and it has the faint explanation for exchange rate expectation.The improvement of the RMB real effective exchange rate has positive influence on the RMB payment of the world in the short term,at the same time to produce the exchange rate appreciation expectation in the short term.Third,RMB payment of the world has the faint explanation for RMB real exchange rate,but it has a high explanation for RMB exchange rate expectation.RMB payment of the world will cause the appreciation of the RMB in the short term,also helps to form the appreciation of exchange rate expectation,but its effect was weak in the long term.