Research On The Factors Affecting The Pricing Of RMB Against Thai Baht

As an important member of the ASEAN member states,Thailand has been increasingly close to its economic and trade cooperation over the years,with the scale of investment expanding and the deepening of financial cooperation.Accompanied by the increasing demand for RMB and Thai baht.Whether the RMB exchange rate against the Thai baht is reasonable will have an important impact on the trade and investment financial cooperation between the two countries.Since both the RMB and the Thai baht are not freely convertible,the exchange rate of both exchanges is based on the US dollar as the main reference.This exchange method will cause exchange losses and increase the cost burden of enterprises and individuals in both countries.In order to better serve the exchange rate between China and Thailand in the economic and trade between the two countries,the trade costs and exchange rate risks of the two countries will be reduced.This paper deeply analyzes the development status and influencing factors of the currency exchange rates between China and Thailand,and explores the equilibrium exchange rate that is consistent with the common development of the two economies.This paper first reviews the theory of exchange rate pricing,and analyzes the historical status and development status of the RMB exchange rate mechanism against the Thai baht.Investigate the significance and problems of the current RMB to Thai baht direct transaction.Further construct a vector autoregressive model containing the differences in money supply.interest rate differences,inflation differences and import and export differences between China and Thailand.Empirical analysis of the factors affecting the exchange rate of the RMB against the Thai baht.The study found that the current pricing of the renminbi against the Thai baht is still mainly based on the US dollar exchange rate.However,the exchange rate of the RMB against the Thai baht can be based on the theory of exchange rate determination.The difference between inflation rate,interest rate difference,money supply difference and import and export difference between China and Thailand is selected as the pricing basis to further improve the exchange rate pricing mechanism and reduce dependence on the US dollar.Finally,based on the conclusions of the empirical model,this paper proposes to improve the RMB-Thai exchange rate pricing mechanism,increase the transaction scale of RMB and Thai baht,promote the development of currency swap agreements,improve the RMB outflow and return channels,and enhance the autonomy of RMB exchange rate pricing.Differences in inflation rates,differences in money supply,and interest rates between the two countries.