Path Analysis Of Monetary Policy On The Influence Of International Capital Flow On RMB Exchange Rate

Since 2012,the People's Bank of China has launched a series of innovative monetary policy.One of the most important reasons is that the pattern of China's international capital flows has changed in recent years.The original use of foreign exchange reserves and foreign exchange into the base currency channels change.The People's Bank of China(PBOC)has introduced a basket of new monetary policy instruments to avoid the shrinking of the base currency,which has changed the way that the original international capital flows have played a role in the RMB exchange rate through monetary policy,increasing the complexity of the RMB exchange rate changes.In the context of the new monetary policy,it is necessary to clarify the new role of international capital flows on the RMB exchange rate path,.Based on the basic currency dimension,the study of the monetary policy path of the international capital flow on the RMB exchange rate will help to sort out the factors that affect the intricacies of the RMB exchange rate and help to understand the effect of conventional exchange rate means such as consumption of foreign exchange reserves or strengthening foreign exchange control.Price,looking for a new way to stabilize the RMB exchange rate.The main innovations in this paper are as follows:1.According to the change of the base money distribution channel,the traditional monetary policy and the innovative monetary policy are differentiated,and the international capital flows,the RMB exchange rate and the monetary policy arc rethought under the different types of monetary policy The relationship between them.2.Based on the perspective of the base currency,the system combs the monetary policy path of the impact of international capital flows on the RMB exchange rate.The role of monetary policy in the path of the impact of international capital flows on the RMB exchange rate is divided into two parts:the spontaneous regulation of the base currency and the active regulation of the central bank's monetary policy.The role of these two parts will eventually be through the base currency channel role in the RMB exchange rate.3.In the light of the reasons for the changes in the direction of international capital flows,consider the measurement of capital outflows under the current account.Through the analysis of international capital flows and the trend of RMB exchange rate,this paper finds that the international capital flows and the RMB exchange rate basically have a negative correlation,but the negative correlation between the scale of international capital flows and the fluctuation of RMB exchange rate is not exactly matched.Flow into the larger period of the RMB and there is no significant appreciation of the situation.In some periods of net capital outflows,the renminbi did not show any significant devaluation.The main reason is that the central bank monetary policy on the international capital flow and exchange rate regulation.However,after the face of the sharp drop in international capital in 2012,the renminbi exchange rate depreciation is expected to be strong,while the central bank at this stage launched a series of innovative monetary policy,but did not stop the RMB exchange rate devaluation.So at this stage monetary policy on the stability of the RMB exchange rate worthy of rethinking and interpretation.In addition,according to the analysis of the balance of payments,this paper analyzes the reasons for the changes in China's international capital flows from,the perspective of changes in the current account,capital and financial accounts and errors and omission accounts:high savings rates,increases in foreign investment and appreciation of the dollar It is expected that the increase in capital flight will result in a new approach to international capital flows based on direct investment,securities investment,other investments and erroneous and missed accounts,and travel abroad under the service capital flight.According to the contrast between traditional and innovative monetary policy,this paper chooses the base currency as a substitute for monetary policy,and divides the source channel of the base currency into two kinds of domestic channels and foreign channels according to the analysis of the central bank balance sheet.And as a basis for the role of monetary policy in the international capital flows on the impact of RMB exchange rate role is divided into the basis of the spontaneous adjustment of the currency and the central bank monetary policy of active intervention two.According to the analysis of Cambridge equation,purchasing power parity theory and Keynesian theory and interest rate parity theory,it is concluded that the base currency is finally adopted through the exchange rate expectation,inflation rate and interest rate,and the effect of the international capital flows on the monetary policy of the RMB exchange rate is finally passed through the base currency.RMB exchange rate.At the same time,this paper also analyzes the impact of changes in international capital flows on monetary policy changes and the different changes in the role of base currency in the path of international capital flows on the impact of RMB exchange rate in the stage of innovative monetary policy.In this paper,the VAR model is used to analyze the traditional and innovative monetary policy and the international capital flow and the RMB exchange rate model.The conclusion is as follows:Granger causality test,impulse response analysis and variance decomposition analysis are as follows:First,the basic currency is the central bank to use monetary policy to control and stabilize the RMB exchange rate of the main tools,in the traditional monetary policy period,a large number of international capital flows through foreign exchange reserves and foreign exchange means to make the base currency active expansion.The base currency is mainly expected by the interest rate and the exchange rate,and the inflation rate plays a role in the RMB exchange rate.Second,international capital flows have always been a major external factor in the volatility of the renminbi.However,under the innovative monetary policy,in the face of the net outflow of international capital,the main role of the central bank's monetary policy is to avoid the net capital outflow caused by the decline in the underlying currency.The decline in foreign exchange reserves has reduced the space of the central bank's foreign exchange intervention,and the use of a large number of innovative monetary policy instruments has expanded the domestic source of the base currency and played a small role in regulating the depreciation of the RMB.