| In recent years,the international situation has become increasingly complex along with the Russia-Ukraine conflict,the epidemic and the US dollar interest rate hike,and the RMB exchange rate has become increasingly elastic.In a review of the RMB exchange rate trend in 2022,the Bank of China Research Institute noted that the RMB has depreciated significantly against the USD since 2022,reaching 7.32 on November 3,the lowest value since the 2015 exchange rate reform,and returning to "7" again in December of the same year.In the context of the increasing marketization of the RMB and the complex international economic and political environment,such frequent large fluctuations in the exchange rate are bound to affect the prices of Chinese export trade goods and thus China’s foreign trade and economy,but the impact of exchange rate changes on trade actually depends on the size of the exchange rate transmission effect on the prices of trade goods,and whether it can be fully transmitted is the key element.Therefore,in the global context of increasingly complex international situation,marketization of RMB and frequent fluctuations of exchange rates,it is of great theoretical and practical significance to study the transmission effect of exchange rate fluctuations on the prices of traded goods.In contrast to the previous literature on the transmission effect of exchange rates on prices,this paper explores the transmission effect of exchange rates on the prices of Chinese export trade goods in trade transactions between China and the rest of the world,under the currency of trade denomination.This paper empirically investigates the impact of RMB exchange rate fluctuations on the transmission effect on the prices of export traded goods.The study finds that,first,RMB exchange rate appreciation will significantly increase the prices of Chinese export tradables.Second,after controlling for the exchange rate between China and the United States,the transmission effect of the RMB exchange rate on the prices of traded goods has a greater increase,indicating that there is a "RMB-US dollar-trading country currency" price transmission path in the context of the US dollar settlement.Third,the exchange rate reform in 2015 significantly facilitated the transmission of the RMB exchange rate to the prices of traded goods.Fourth,there is heterogeneity in the effect of RMB exchange rate on the price transmission of traded goods across sample subgroups,with exchange rate fluctuations having a greater impact on the price transmission of differentiated products and the price transmission of traded goods in non-high-income countries.Finally,this paper further demonstrates the robustness of the RMB exchange rate effect on the price transmission of traded goods after excluding the possible effects of specific samples and extreme values. |
