The Research On The Reform Of RMB Exchange Rate Formation Mechanism In Terms Of The Internationalization Of RMB

China was a country who lacked foreign exchange reserves,but now it has the largest trade surplus and foreign exchange reserves in the world,and the RMB joined the SDR basket in 2015,economic strength and international status had improved a lot.Nowadays,with the integration of the world economy,the economic exchanges between countries become more and more closely,and the exchange rate plays important part in the development of a country.With the fact that China has become the biggest trading country,the RMB gradually emerged in the world monetary system,and served as a function of more trade settlement,foreign exchange market transactions and reserve currency.Since the RMB internationalization has been gradually clarified in 2009,the reform of the RMB exchange rate formation mechanism has faced new challenges as well as new circumstances.On the one hand,the internationalization of the RMB influences the formation of the RMB exchange rate form the trade settlement,the RMB offshore market,cross-border capital flows;on the other hand,China’s current exchange rate formation mechanism is not accurately determined by the competition between the market supply and demand,but because of many aspects of intervention,which is not beneficial to the internationalization of the RMB.In order to eliminate the barriers to the internationalization of the RMB,the exchange rate formation mechanism needs to be gradually reformed according to the requirements of RMB internationalization.The definition of the RMB exchange rate formation mechanism is not clear at present.This article suppose that the exchange rate formation mechanism is a series arrangements and the action principle that associates with the generation of the exchange rate,it includes many aspects: such as the choice of exchange rate regime,the other is the formation of the exchange rate under specific exchange rate regime Therefore,this article focuses on the choice of exchange rate regime and other aspects related to the formation of exchange rate.The purpose of this article is to analyze the existing problems of the current RMB exchange rate regime in terms of the internationalization of RMB and try to give some suggestions.This article first describes the research background,summarizes the literature review.Then it introduces the related theories of exchange rate formation mechanism,including the Mint Parity theory,Gold Parity theory,Purchasing Power Parity theory and Interest Rate Parity theory.Then the article reviews the exchange rate reform since 1994 and make comparison between them.Because of the restrictions in the exchange rate system and foreign exchange market,the current exchange rate in not free.After that,it analyzes the influence of RMB internationalization on exchange rate formation mechanism.It describes the process of RMB internationalization in several stages,analyzes several channels of RMB internationalization influencing the exchange rate formation mechanism,and proposes the requirements of the exchange reform.Finally,give some suggestions of the path of the reform of the reform of the RMB exchange rate formation mechanism: not only insist on strengthening the role of the market in the formation of exchange rate mechanism,gradually expand the exchange rate fluctuation range,open the capital account,improve the foreign exchange market;but also pay attention to the coordination of the reform of the RMB exchange rate formation mechanism and the internationalization of RMB,reduce the consumption of foreign exchange reserves,strengthen the regulation of speculative capital.This article mainly uses the literature research method,the experience summary method and the quantitative analysis method.The innovation of this article lies in researching the reform of RMB exchange rate formation mechanism under the background of internationalization of RMB,closely linked with reality,analyzing the latest data,and paying attention to the comparison of the exchange rate formation mechanism of different periods and between different countries,so that the analysis is based on reality and the suggestions are more feasible.