US Dollar Anchor To Debt Anchor: A Study On The Change Of RMB Issuance Mechanism

In recent years,the People's Bank of China has created a series of innovative monetary policy tools to enhance the flexibility of the central bank's monetary policy control.However,the trade war between China and the United States has led to the RMB exchange rate becoming more volatile,which has also had a certain impact on the internationalization of the RMB.All the above events are related to the RMB issuance mechanism.The study on the RMB issuance mechanism is not only related to the monetary policy tools adopted by the central bank to coordinate with the formulation of monetary policy,but also related to the independence of monetary policy and more importantly to the internationalization of RMB.First of all,this paper uses the qualitative and quantitative analysis method,through the analysis of the balance sheet of the central bank,studies whether the structural monetary instrument has become the main channel of new RMB base currency since its establishment,and points out that the national debt has played an important role in RMB issuance through the analysis of the qualified collateral of the structural monetary policy instrument.Secondly,this paper discusses the necessity and feasibility of local government bonds participating in the issuance of RMB base currency.The necessity analysis focuses on the significance of the reform and the reality of the insufficient scale of national debt.The feasibility analysis focuses on the legal guarantee,the existing practice and the scale of local government bonds.Thirdly,this paper discusses the future effects of national debt and local government bonds participating in the issuance of RMB base currency,which changes the value composition of RMB and improves the effectiveness of monetary policy.Fourthly,this paper discusses the risks of local government bonds participating in the issuance of RMB base currency and possible countermeasures,mainly credit risks and policy risks.The conclusion of this paper is that RMB is undergoing the transformation from dollar anchor to debt anchor,and national debt and local government debt will be the main value anchors for new RMB base currency issuance in the future.In order to make local government bonds play the role of RMB value anchor,this paper puts forward the following three Suggestions: reduce the risk weight of local government bonds,create more government bonds,and promote the construction of bond market.