Research On The Anchor Effect Of RMB On The Belt And Road Countries

In recent years,China's economy has achieved rapid growth.Comprehensive strength has been continuously enhanced,and the degree of internationalization of the RMB has also expanded.The frequent outbreak of the financial crisis,in the context of global economic integration,has prompted many emerging economies to reform the exchange rate policy of singly anchoring strong currency.In 2013,China proposed the “One Belt,One Road” strategic plan,which is intended to balance the common development within the region.Studying the regional anchor effect of the RMB in the “Belt and Road” can not only directly measure the regional influence of the RMB,but also help compare the gap between the RMB and the major international currencies,and then provide suggestions for the internationalization of the RMB.This paper summarizes and analyzes the theory of currency anchor correlation.It first describes the definition and characteristics of currency anchor,sorts out the evolution process and selection experience of international currency anchor,and then summarizes the main influencing factors of anchor currency selection based on classical anchor currency theory.The paper combines the characteristics of the currency anchor with the actual data to summarize the current advantages of China in terms of political strength and economic level to demonstrate that the RMB has the realistic basis to become a regional anchor currency in the “Belt and Road” area,and then reveals the significance of the RMB being anchored in the region.After analyzing the theoretical and practical possibilities of the RMB regional anchor effect,this paper draws on the Frankel & Wei currency anchor effect regression model to specifically measure the anchor effect of RMB in the “Belt and Road” region.The empirical results show that the US dollar is still the core anchor currency of the region.Although the RMB does have an anchor effect in the currency baskets of these countries,the effect is weak and mainly concentrated in neighboring countries such as Southeast Asia.At the same time,the “One Belt,One Road” strategy has weakened the intervention of the extra-regional economies on regional economic development and is conducive to promoting regional common development.Finally,the paper summarizes the conclusions of the full text,and proposes some policy suggestions to promote the regionalization and internationalization of the RMB.It is proposed to continue to play the role of emerging regional financial institutions,increase investment in Eastern Europe and West Asia countries along the “Belt and Road”,and promote the overseas export of the RMB.At the same time,we will continue to promote the China's domestic economic transformation and upgrading,the opening of financial markets and capital projects,the reform of the RMB exchange rate system to provide the support for the currency strength of the RMB.