Research On The Dynamic Relationship Between RMB Value Fluctuation And RMB Internationalization

The 19 th National Congress report of the Communist Party of China pointed out that China should gradually improve the new open economic system,focus on the construction of "Belt and Road" and form an open pattern of linkage between the mainland and the outside world and two-way economic assistance between the east and the west.It is necessary to improve the two-pillar regulatory framework of monetary policy and macro-prudential policy,deepen the market-oriented reform of interest rates and exchange rates,and give new impetus to the internationalization of the RMB.The development of RMB internationalization is at an early stage,which is influenced by the factors of domestic economic strength and currency fluctuation.Based on the research background of the fluctuation of RMB value and RMB internationalization development,this paper expounds the concept theory of RMB value and its internationalization,and constructs a Cournot model based on the competition mechanism between currency issuing countries.This paper explores the basic factors that influence currency internationalization,selects index variables,constructs SVAR model,and depicts the dynamic influence relationship between RMB value fluctuation and RMB internationalization from an empirical point of view.This article mainly carries on the research from the following several aspects:Firstly,from the perspective of the three functions of international currency,this paper expounds the current situation of RMB internationalization,and theoretically analyzes the interaction mechanism between the fluctuation of internal and external value of RMB and the internationalization of RMB.Secondly,the welfare function of currency internationalization is constructed,and the competition and cooperation among the issuing countries in the process of currency internationalization are analyzed by Cournot model.The factors influencing the time span of the game to reach the Pareto optimal equilibrium state are discussed in the case of repeated games for a long time.Taking the national fundamental factors as the analysis object,this paper mainly analyzes the influence of the domestic inflation factor,the interest rate factor and the exchange rate factor on the process of currency internationalization.Finally,according to the result of game theory analysis,the index variables are selected,and construct the SVAR model.The causality between variables is determined by Granger causality test.Impulse response analysis is used to analyze the influence relationship among variables.Through the prediction error variance decomposition of each variable,the degree of mutual influence between variables is obtained.The quantitative results of the dynamic influence and mutual influence between the fluctuation of internal and external value of RMB and the internationalization of RMB are obtained by empirical analysis.The conclusion shows that there is a significant interaction between the value fluctuation of RMB and the RMB internationalization process.In the short term,RMB's external value fluctuation is a significant factor in the process of RMB internationalization,and there is a remarkable and sensitive interaction between them.The rise of domestic inflation is a significant factor hindering the internationalization process of RMB,but the acceleration of RMB internationalization process has a weaker effect on shortterm domestic inflation.In the long run,the external value fluctuation and the dynamic response of the relationship between the internationalization of RMB is weak,that RMB foreign revaluation is not guarantee long-term factors explain RMB internationalization degree increase.Long term results show that inflation has limited impact on the process of internationalization of the RMB.However,the long-term development of RMB internationalization is conducive to the reduction of domestic inflation.Through the study of this paper,combined with the actual situation,this paper mainly from the promotion of exchange rate formation mechanism reform,gradually liberalize foreign exchange control,deepen the financial market system construction.Strengthening international cooperation in monetary policy and unwavering confidence in the implementation of "Belt and Road" provides targeted suggestions for the steady development of RMB internationalization.