A Study On Cross-border RMB Trade Settlement Influence On The Effectiveness Of Monetary Policy

In July 1,2009,the people's Bank and other six jointly issued the "pilot management measures for RMB settlement of cross-border trade".The "measures"marked the formal start of the RMB cross-border trade valuation and settlement business in China.With the establishment of solid Belt and Road Initiative "planning and investment bank,FTA,cross-border RMB settlement into the stage of rapid development,especially the RMB in October 1,2016 officially joined the SDR,to further enhance the international influence of the rmb.Because of the existence of capital project control,imperfect currency reflux mechanism,insufficient international recognition of RMB and weak import and export bargaining power,many factors lead to the growth of RMB business in cross-border trade,but the structural imbalance is serious.At present,the payment of RMB is significantly greater than the real income,resulting in a large amount of net RMB outflow.With the size of the foreign RMB stock,it will impact on the supply and demand of domestic currency,and then affect the effectiveness of monetary policy.This paper,based on the research results of RMB internationalization,RMB cross-border capital flow,RMB valuation and settlement,and monetary policy,uses theoretical and empirical analysis to analyze the effect of RMB cross-border trade settlement on the effectiveness of domestic monetary policy.In theory,several equilibrium models are constructed according to the macroeconomic theory,and the influence of RMB cross-border trade settlement on monetary policy targets,such as money supply and demand,interest rate,exchange rate,price and output,is analyzed from the dynamic point of view.In the empirical study,the two segments of 2003-2009 and 2011-2017 were selected to compare the changes in the effectiveness of the monetary policy before and after the implementation of the RMB cross-border trade settlement.The theoretical and empirical results show that RMB's cross-border trade settlement has certain effect on the effectiveness of monetary policy in China.Before the pilot of RMB cross-border trade settlement,the monetary policy of China is effective.The monetary authorities can regulate the interest rate,exchange rate,price and output by regulating the supply of broad money.But the effect of monetary policy on the adjustment of interest rate,exchange rate,price and output is more or less weakened after the business pilot.The RMB settlement in China's cross-border trade is in an accumulating stage.With the expansion of its scale,the future impact on the effectiveness of monetary policy will be more significant.This article suggests that the prevention of it should be avoided.First,we should constantly improve the business logic of the cross-border RMB valuation and settlement,reduce the risk and impact of the RMB settlement,and then promote the Chinese finance.The reform of the system makes the capital project open step by step;finally,we can adjust the measurement standard of the effectiveness of monetary policy,select the more controllable and measurable intermediate target of monetary policy,and enhance the effectiveness of the monetary policy.