The Impact Of Sino-US Monetary Policy Differentiation On China's Financial Market

Today,international capital flows have become more frequent and the international capital market has become more open.According to the theory of spillover effects,the more ideal state of global monetary policy is convergence.The monetary policies of various countries should be coordinated,maintain the same rhythm,and try to avoid the occurrence of unstable spillover effects in various countries' economies.However,with the changes in the economic situation in the United States in recent years,the Fed began to raise interest rates.China has not followed the US interest rate hike several times.Therefore,the exchange rate of the RMB against the US dollar continued to fall,and the divergence of China-US monetary policy became more and more obvious.China's monetary policy,foreign trade,and the stock market,bond market,and exchange rate market have all been affected and faced challenges.Therefore,we should pay attention to the differentiation trend of US monetary policy and understand the impact of the divergence of monetary policy between the two countries on China's financial market.This paper explores and summarizes the history of the divergence of China-US monetary policy,and summarizes the impact of monetary policy differentiation on China's financial market.Combined with the theoretical model of macroeconomics and the transmission mechanism,this paper also analyzes theoretically the impact of monetary policy differentiation.We use deposit reserve,M2 and one-year interest rate of China's demand deposits to reconstruct the multivariate regression model for empirical analysis.They represent the three major instruments of the money market,the statutory deposit reserve,the open market business and the refinancing rediscount business.We select the 10-year government bond Interest rates,stock price indices and exchange rates as the representative of China's financial markets.The multi-regression model is set up by combining the import and export data of China and the United States.In this way,the impact of the divergence of China-US monetary policy on China's financial market is obtained.The analysis shows that the differentiation of the statutory deposit reserve policy between China and the United States has a positive impact on China's bond market and exchange rate market,and has no significant impact on the stock market.The differentiation of China-US money supply policy has a significant adverse effect on China's bond market,and has no significant impact on the stock market foreign exchange market.The degree of differentiation of Sino-US interest rates has a negative impact on China's bond market,and has no significant impact on China's stock market and foreign exchange market.According to the results of theoretical analysis and empirical analysis,based on China's national conditions,economic status,and economic goals,China's central bank is responding to the increasingly obvious Sino-US monetary policy differentiation,and can focus on the domestic economic situation and maintain the independence of monetary policy.However,it is necessary to pay attention to the direction and extent of the divergence of China-US monetary policy,and take optimization measures on interest rate policy and exchange rate policy.