Research On The Volatility Of RMB Exchange Rate

As the unique currency in China,RMB plays an increasingly important role in the world economy.The rising international status of RMB has attracted the attention all over the world.Maintaining the stability of the exchange rate of RMB plays an important role of the world economy.Since the founding of China,the policy of RMB exchange rate has undergone several changes.It has a process from planning to marketization,from closure to opening,from rigidity to flexibility.On July 21,2005,the famous 721 exchange reform pointed out: “China has started to implement a managed floating exchange rate system based on market supply and demand,with reference to a basket of currencies for adjustment.” With the outbreak of the financial crisis in 2008,RMB once again returned to watch the fluctuation of the US dollar.After 2010,several famous exchange policies has established such as 317 exchange reform,811 exchange reform,and 526 exchange reform.These reforms give much influence on the trend and the volatility of RMB exchange rate.This paper is based on the four exchange reforms that occurred after 2013.The samples are divided into five sections and we research them from unconditional variances and conditions.The qualitative and quantitative analyses of variance are given respectively.Descriptive statistics,correlation coefficient testing methods show that the direction of several exchange reforms in China is to gradually relax supervision.The highest level of freedom of exchange rates is 811.After 2016,the reforms continue to tighten the policy,turned head to pay attention to the direction of a steady exchange of a basket of currencies.ARCH is used to test heteroscedasticity.The results of ARCH tests show the existence of heteroscedasticity mostly.We need to have awareness and ability to guard against risks and shocks.