The Impact Of Exchange Rate Fluctuations On The Internationalization Of RMB-International Experience And Empirical Studies

Through the exploration of the internal decisions and influencing factors of RMB internationalization,the problems encountered in the internationalization of RMB can be solved.Among the many factors that affect the internationalization of the RMB,fluctuations in the RMB exchange rate is a very important factor,which will directly affect capital project transactions and overseas RMB asset demand to impact on the internationalization of the RMB.This article explores the relationship between the two by using theoretical and empirical methods,and proposes some policy suggestions based on this,hoping to help the internationalization of the RMB.The theoretical part of this paper first elaborates that the impact of exchange rate fluctuations on the capital market and international trade.Exchange rate fluctuations affect the currency internationalization of a country by affecting the stock of assets denominated in a country's currency as well as the international trade pricing of domestic currency trade.From the perspective of the experience of currency internationalization,this paper selects US dollar,Japanese yen and British pound as reference currency,and elaborates on the different stages of these three currencies in internationalization.At the same time,by combining exchange rate changes in corresponding stages,the impact of exchange rate fluctuations in the internationalization of currencies can be intuitively and truly demonstrated,providing international reference for the internationalization of the RMB.Summing up the international experience can tell that not only grasping the historical opportunity is very important for realizing currency internationalization,but also paying attention to the risk control in the domestic economy and financial markets.Empirical analysis works on the effect of exchange rate fluctuations on the internationalization of the RMB.There is a stable long-term equilibrium relationship between the deposit balance and the real effective exchange rate of the RMB,the level of development of the financial market and the size of the economy.The internationalization of the RMB is sensitive to changes in the real effective exchange rate of the RMB.The increase in the effective exchange rate of the RMB can positively affect the internationalization of the RMB in the long term.At the same time,the growth of the economic scale and the deepening of the development of financial markets will also play a positive role in the internationalization of the RMB.Finally,based on the results of empirical research,this paper proposes some policy recommendations.First of all,China should take economic development as its foundation,build a solid macroeconomic foundation for currency internationalization,adjust its economic structure while continuing to optimize international trade,and at the same time,macroeconomic policies should tightly integrate the regulation of RMB internationalization.Second,a sound RMB exchange rate system should be established to ensure reasonable fluctuations in the exchange rate of the RMB so that fluctuations in the exchange rate of the RMB can be maintained within a relatively appropriate range and the confidence of the international market in the RMB can be consolidated.Finally,we should prudently promote the realization of the liberalization of capital projects,gradually liberalize our country's financial markets,and gradually promote the internationalization of the RMB.