Research On RMB Exchange Rate Formation Mechanism

In the current global economic situation,with the economy of our country switch from rapid growth stage to the high quality development stage,the reform and open policy move forward steadily,and China's influence in the world trade is unceasingly strengthened,so the role of RMB in international trade and international investment is also becoming more global.Along with the pace of RMB's international,the pace of China's RMB exchange rate regime's reform has never slowed down.The development of the onshore and offshore RMB market is common,and the trading scale is gradually expanded,trading varieties are constantly enriched,and the development results are remarkable.In this process,it is necessary to answer the question of how the reform of RMB exchange rate regime mechanism affects the linkage of RMB exchange rate between the two markets.This paper discusses this problem from the angle of theory and demonstration.Firstly,by sorting out the relevant research literature on the formation mechanism of RMB exchange rate and the linkage between offshore and onshore markets,the existing researches are systematically summarized.Then,starting from the theoretical mechanism of the linkage relationship between the RMB exchange rate formation mechanism and the offshore and onshore markets,this paper makes an in-depth study of how the offshore and onshore RMB markets influence each other and the impact of the reform of the onshore RMB exchange rate formation mechanism on the linkage relationship between the two markets.This paper argues that the linkage between the two markets can be explained by the theory of interest parity and information spillover effect.For the empirical research process.Firstly,this paper analyzes the development process of the offshore and onshore RMB market and several reforms of the formation mechanism of the onshore RMB exchange rate regime.It can be intuitively observed that there is a certain linkage between the change trend of the offshore and onshore RMB exchange rate.After the qualitative analysis of the offshore RMB market and the onshore RMB market,combined with the empirical analysis,it shows the linkage between the offshore RMB market and the onshore RMB market before and after the reform of the RMB exchange rate formation mechanism.Mainly based on the data from May 2,2012 to "8 · 11 reform",the introduction of the inverse cycle factor at the end of may yet three stages on the empirical analysis of the main measurement methods for the granger causality test and GARCH model,and the final results show that the before the "8 · 11 reform",offshore one-way leading onshore renminbi exchange rate of RMB exchange rate,one-way spillover effects on the formation onshore offshore market;After the"8 · 11 reform",the onshore RMB exchange rate unidirectional guided the offshore RMB exchange rate,and the spillover effect between the two markets occurred.After the introduction of counter-cyclical factors,the offshore RMB redirects the onshore RMB exchange rate and returns to the one-way spillover effect of offshore to onshore.Combined with the qualitative and quantitative analysis of the linkage between the offshore and the onshore RMB market,this paper puts forward several policy suggestions:First,the RMB exchange rate formation mechanism should be reformed in a more market-oriented direction;Second,interest rate liberalization is one of the necessary options.Third,the channel of RMB flow in the offshore and onshore markets should be dredged.Fourth,enrich the composition of onshore market participants.