Research On The Linkage Effect Of RMB Exchange Rate Between Onshore Market And Offshore Market

In recent years,the linkage effect of offshore RMB exchange rate and onshore RMB exchange rate has become a widespread concern of many scholars as the internationalization of RMB and reform of RMB exchange rate determination mechanism.There are many studies about the effect of the reform of RMB on 11th August,2015 and most of the studies show that the coupling effect of onshore RMB exchange rate and offshore RMB exchange rate became stronger after this reform.On one hand,since 2015,the global economical and political situation has become complicated and volatile,the internationalization of RMB is facing with great challenges in case of interest rate hike of FED and trade war between China and America.On the other hand,after the reform of RMB exchange rate mechanism in2015,the Central Bank of China introduced counter-cyclical factor for RMB exchange rate.Therefore,it is necessary to study the coupling effect of onshore RMB exchange rate and offshore RMB exchange rate under new circumstances,which will help to figure about the differences and changes about the coupling effect and promote the internationalization of RMB.This paper reviews the related literature in this field,summaries the connected channel of onshore and offshore RMB market.Based on the theoretical analysis of linkage effect between onshore and offshore RMB market,this paper chooses CNY market exchange rate,CNH exchange rate and NDF market exchange rate as target variables and selects data from 11^thAugust 2015 to 28^thJune 2019 to do empirical study.The empirical part spill into four parts according to the time point of the introduction,pause and reintroduction of counter-cyclical.It finds the counter-cyclical factor strengthen the linkage effect between onshore market and offshore market and can filter the herd behavior effectively,making the exchange rate fluctuation more reasonable.