Study On Degree Of Capital Account Liberalization Impact On Currency Crisis

China's accession to the WTO since the economic and financial globalization is also the pace of continuous speed.The Chinese government has put the "progressive realization of capital account convertibility" as one of the goals of deepening the financial reform and perfecting the macro-control system.In recent years,in order to meet the needs of economic development and reform and opening up,in the process of continuing to open up the capital account,the degree of free convertibility has been significantly improved.In 2009,the RMB became a cross-border trade settlement currency,which would inevitably lead to a series of problems,such as how to refrain the RMB financing of domestic enterprises,the lack of investment opportunities for foreign banks and enterprises held by overseas banks,and thus forced China's capital projects to accelerate Open process,RQFII,RQDII institutional arrangements,Shanghai-Hong Kong Stock Connect,Shenzhen-Hong Kong Stock Connect and so on.Based on the above background,how to measure the opening process of RMB capital projects in China and how to raise the possible monetary crisis of capital account opening has become one of the focuses of many scholars.With the acceleration of economic and financial globalization,the process of RMB capital account liberalization will continue to advance.Based on this background,beginning with theoretical analysis of conduction mechanism between capital account liberalization and currency crisis,and then build a research model of currency crises by using MS-VAR model,finally using a large number of historical monthly data to conduct a comprehensive empirical test on china.The results showed that:Opening of capital account in low-risk state is conducive to the development of financial markets,but in high-risk state will contribute to the volatility of currency market,and induce the occurrence of currency crisis by the impact of short-term capital flow,capital flow reversals,exchange rate fluctuations increased and resulting in external debt dependence.Most of the time during the study period,China's currency market is in a state of low to moderate risk,it is roughly consistent with our country economy overall situation.In addition,during the high-risk warning signals of currency crisis,mostly accompanied by interest rate and exchange rate fluctuations,fast frequent capital flows as well as the rapid growth of FDI and external debt balance,which also indicates that there is a higher risk in capital account liberalization.In order to obtain the international experience which can be used for reference,the scope of the sample is extended to the OECD countries.By using the threshold regression method for the data of the OECD countries,the structural indicators and the term indicators of the opening degree of the capital account are respectively analyzed by threshold to determine the capital account(1)When the opening term of the capital project is less than-16.1350,the higher the capital scale of the capital project will have a positive effect on the currency crisis.When the opening term of the capital account is in the[16.1350,-12.0417),the opening degree of capital account has no significant effect on the currency crisis.When the opening term of capital account is larger than-12.0417,this means that the higher the capital scale of the capital project will have the effect of suppressing the currency crisis.(2)When the opening index of capital account is less than 0.4583,the open-term structure index of capital account and the opening index of capital account have a negative impact on the currency crisis,and the opening degree of capital account can suppress the occurrence of currency crisis.When the opening scale of the capital project is greater than 0.5034,the opening index of the capital account has a positive effect on the currency crisis when the openness index of the capital account is not significant impact on the monetary crisis when the opening index of the project is[0.4583,0.5034).Finally,according to the conclusions drawn,how to avoid the currency crisis in China's capital account put forward appropriate policy recommendations.Finally,according to the conclusions drawn,how to avoid the currency crisis in China's capital account put forward appropriate policy recommendations.