The Impact Of Exchange Rate Marketization Reform On The Internationalization Of RMB

With the development of China's economy,the increasingly strong foreign trade and economic exchanges have put forward realistic demands for the internationalization of RMB.With the cooperation of various policies,RMB's entry of the Special Drawing Rights(SDR)in October 2016 marked a phased victory in the internationalization of the RMB.At the same time,the impact of policy and institutional factors on the internationalization of RMB has become increasingly prominent with the deepening of China's economic system reform.As one of the important tasks of China's financial system construction,exchange rate marketization reform will have a significant impact on the internationalization of RMB.The purpose of this paper is to clarify the impact mechanism of exchange rate marketization reform on RMB internationalization,and explore the positive interaction mode between exchange rate marketization and RMB internationalization,so as to promote the coordinated development of both.This paper studies the relationship between exchange rate marketization reform and RMB internationalization from four dimensions:historical experience,international comparison,theoretical analysis and empirical analysis.Firstly,This paper combs the reform process of exchange rate formation mechanism in China and makes a preliminary study on the changes of exchange rate marketization in recent years.At the same time,combined with relevant data and policies,This paper analyzed the current situation of RMB internationalization.Based on the above two aspects,considering the internationalization process of pound sterling,dollar,yen and Deutsche Mark,this paper preliminarily explores the impact of exchange rate marketization reform on the internationalization of RMB.Secondly,based on the literature review of the latest research results,this paper constructs the theoretical system of the impact mechanism of exchange rate marketization reform on RMB internationalization from two dimensions,direct and indirect.In terms of the direct impact mechanism,the exchange rate marketization reform will delay the process of RMB internationalization through risk aversion mechanism in the short term.Marketization will promote the RMB exchange rate to converge gradually to the equilibrium exchange rate level,so the real price mechanism will play a good role in the medium and long term.In terms of the indirect influence mechanism,the rise of RMB exchange rate volatility caused by exchange rate marketization will restrain the development of RMB internationalization.At the same time,the interaction mechanism between exchange rate marketization and RMB internationalization is discussed in depth,and the theoretical system is further improved.Thirdly,this paper makes an empirical analysis based on the theoretical system constructed above.In order to accurately depict the dynamic evolution of China's exchange rate marketization,this paper makes a thorough study and analysis of China's exchange rate marketization reform process based on rolling regression analysis.The regression results show that China's exchange rate marketization reform has always adhered to the principle of self-control,showing considerable graduality and robustness.Subsequently,the dynamic relationship between exchange rate marketization and RMB internationalization in China from 2012 to 2017 is quantitatively studied by using VAR model.The impulse response results show that,firstly,the favorable mechanism of RMB internationalization has not been brought into play by exchange rate marketization;secondly,the exchange rate marketization will increase the volatility of RMB exchange rate,which will have a negative impact on RMB internationalization.Third,the positive interaction mechanism between exchange rate marketization and RMB internationalization has not yet been established,and RMB internationalization can not effectively help the reform of exchange rate marketization.Finally,based on the historical experience,international comparison and empirical results,and from the perspective of RMB internationalization,this paper puts forward policy suggestions for China's exchange rate marketization reform.