Research On The Influence Of The Change Of RMB Exchange Rate To China's Financial Stock Price

Since the start of China's exchange rate reform,the RMB exchange rate's volatility increase,capital account's openness has increased,foreign funds continue to enter the domestic market,the domestic stock market is influenced by the overseas market in the capital and management level more and more deeply.The interaction between the domestic stock market and the international stock market and the foreign exchange market is becoming more and more obvious.Under this background,it is of great theoretical and practical significance to research the relationship between foreign exchange market and stock market and the impact of RMB exchange rate fluctuation on domestic stock market.The financial industry is always the most special industry.On the one hand,the operation of the financial industry is closely related to the foreign exchange market and the RMB exchange rate.On the other hand,the financial industry is also highly correlated with the stock market.In A-share market,the trend of the financial industry index is quite consistent with the overall trend of the A-share market.Therefore,this paper chooses to explore the effect of RMB exchange rate on China's financial stock price.In this paper,qualitative and quantitative methods are used to study the effect of RMB exchange rate changes on financial stock prices.First of all,through qualitative methods,it is theoretically analyzed how exchange rate changes affect domestic stock prices and the financial industry stock price index through a series of channels including international trade,international capital flows,interest rates,and financial policies.And discussed how exchange rate changes affect the financial industry's operating performance.Secondly,through ADF test,cointegration test,vector autoregressive model and impulse response function method,the linkage relationship between RMB exchange rate and financial industry stock price index is studied quantitatively.The results show that there is no long-term co-integration relationship between the two variables,and there is only a one-way guidance relationship between the exchange rate and the financial industry index.Finally,according to the results of theoretical analysis and empirical test,the conclusions of this paper are drawn,and the policy recommendations to promote the healthy development of China's foreign exchange and financial markets are given.