Empirical Analysis On The Impact Of RMB Exchange Rate To Stock Price Of Financial Stocks

RMB was qualified for the SDR basket.,which is a step forward on the road of internationalization of RMB Since the exchange rate reform in 2005.So far,RMB has become the world's eighth largest trading currency.This also marks the market-oriented reform of RMB exchange rate to promote,and RMB exchange rate fluctuations become complicated.Meanwhile,China's stock market is also constantly reforming and opening up.The further opening of China's capital account enhances the degree of correlation between China's stock market and the world economy.Financial reform is also further.The financial market of our country is developing rapidly in the adjustment and competition.And this development is reflected in the complex fluctuations of the price of financial stocks.So far,many literatures have studied the influence of RMB exchange rate on the stock market.However,the research on the relationship between the financial sector and the RMB exchange rate is not so furthered.Financial industry has integrity,and has a close relationship with the currency.Therefore,it is of practical significance to study the impact of RMB exchange rate on the stock price.Therefore,this paper analyzes the impact of RMB exchange rate on the stock price,according to the SSE 180 financial index and the exchange rate of RMB against the U.S.dollar.And this paper put forward the policy suggestions and the strategy of financial stocks investment.This paper consists of four parts:The first part,introduction.First of all,the development of foreign exchange market in the world is briefly described.With the continuous development of the exchange rate regime,the international exchange rate market is more diversified,and exchange rate fluctuations become frequent and complex.In such a world economic environment,China is also constantly reform the exchange rate system,and promote the process of internationalization of RMB.Therefore,the relationship between China's stock market and RMB exchange rate is getting much closer.This paper also summarizes the existing theories and literatures,which lays a solid foundation for the research in this paper.The second part is the review of theories and analysis.This part introduces exchange rate determination theory,stock price theory,the theory of the relationship between exchange rate and stock price and the influence mechanism of exchange rate fluctuation on stock price.This part studies the existing theories deeply and systematically.And this part combines theory with Chinese reality and analysis from two aspects and describes the application background of the theory in china,carrying out the actual analysis,which provides a theoretical basis for empirical analysis.The third part is the empirical analysis of the impact of RMB exchange rate changes on the stock price.In this paper,the SSE 180 financial index is used as the index of financial stocks.Data from July 21,2005 to February 16,2017 were selected as samples.Then,through the empirical test of unit root test,co integration test and Grainger causality test,the relationship between RMB exchange rate and stock price of financial stocks is studied and tested.The fourth part is the policy suggestions and suggestions for the investment of individual investors.This part sums up the conclusion,using the empirical results obtained in the third part,and combining the theory.At the same time,according to the conclusion,some suggestions are put forward on policy and the investment of individual investors in financial stocks.The main advantages of this paper are as follows.Firstly,this paper studies financial stocks as a whole,and take into account the integrity of the financial industry and its increasingly close relationship with the exchange rate.The empirical analysis is carried out by using SSE 180 financial index and RMB exchange rate.Secondly,The sample is divided into six parts in order to analyze.Considering China has chosen a temporary emergency strategy in financial crisis in 2008 and there were several exchange rate reforms,the empirical results will be biased if sample is not divided into six parts.Therefore,it is helpful to get more accurate results.And the investment proposal put forward in this paper is more referential.