Research On The Interaction Among RMB Internationalization With Exchange Rate, Interest Rate And Capital Project Opening

In 2016,the RMB was officially added to the SDR basket,which rapidly developed the internationalization of the RMB?In this context,China needs to promote financial reform deeply,including interest rate marketization reform,exchange rate regime reform and capital account liberalization.The interest rate marketization reform has been basically completed.In 2009,the internationalisation of the renminbi became one of the most important issues in the government working.Market-oriented interest rate reform,exchange rate system reform,and gradually open capital account policy plays an irreplaceable role in promoting the process of RMB internationalization.Besides,after the RMB internationalization gradually,it will affect the domestic financial reform,domestic reform of interest rate,exchange rate reform,the improvement of the capital account opening.It is necessary to clarify the relationship between these factors.Therefore,this article will be on the relationship among internationalisation of the renminbi,changing interest rate,exchange rate changes and capital account liberalization on theoretical and empirical.Choosing the offshore yuan deposits,the RMB exchange rate,exchange rate expectations,interest rates and capital account openness as endogenous variables,using offshore yuan deposits as a measure of the internationalisation of the renminbi,and choosing monthly data from 2009 to 2017,building structural vector autoregression model,to empirically analyze the internationalisation of the renminbi and exchange rate,interest rate,the dynamic relationship between the opening of the capital.The empirical results show that there is a two-way interaction between RMB internationalization and exchange rate expectation,and the interaction between interest rate and capital project opening and RMB internationalization is not significant.In view of the current situation,the exchange rate policy should be actively coordinated to avoid the sharp depreciation of the exchange rate and maintain the market expectation of relatively stable exchange rate.We will improve the mechanism for setting the central parity rate of the RMB exchange rate,and avoid the negative impact of large exchange rate fluctuations on the internationalization of RMB.In the short term,the RMB exchange rate should continue to have a managed floating exchange rate regime.With the promotion of RMB internationalization,China should comply with the requirements of international market development,gradually increase the exchange rate flexibility and finally realize full floating of exchange rate.On this basis,we will gradually reduce capital account control and finally realize the free flow of capital.