An Analysis Of The Factors Which Influencing Rmb Exchange Rate

In order to assess the coordination between the RMB exchange rate and economic system operating conditions and to provide alternative management variables to the monetary authorities, the paper primarily reviews controversial theory about exchange rate and relative empirical study, meanwhile, does some comprehensive study to the fault in the controversial studies. The paper subsequently studies the major macroeconomic factors which have been influencing value of RMB after China's reform of RMB exchange rate system. From the perspective of econometric analysis the author builds theoretical model based on the structure of SVAR, considering relationships among the exchange rate and other key macroeconomic variables under the interaction of economic variables and the role of information played. This model not only shows the relationships conducted endogenously by the exchange rate, foreign exchange reserves, money supply, gross national product, the total stock, but also contemporary interaction between these variables as information in the same period.The findings are as follows:First, the RMB exchange rate is not only hysteretically affected by macroeconomic variables such as foreign exchange reserves, but also synchronously by the behavior of foreign exchange market participants whose expectation changes with information change, which is in line with the theoretical assumptions.Second, the information of money supply and gross domestic stock exerts deeper effects on the RMB exchange rate.Third, the RMB exchange rate against the SDR better reflects the value of money than the RMB exchange rate against dollar.Fourth, although the RMB exchange rate against dollar does not reflect the monetary value, it could not be said the value of RMB undervalue; on the contrary, monetary value of the RMB does accord with the Chinese economic developing statue from a fact that the macroeconomic variables explain for the RMB exchange rate against the SDR.In order to penetratingly study the short-term fluctuations in exchange rates when economic variables serve as the information, the paper takes the foreign exchange market as a dissipative system, information as input indicator, the exchange rate as response indicator, then builds the mathematical expression of exchange rate's volatility from the theory of information entropy. From theoretical analysis it was found how to detect effects of exchange rate fluctuations on which the different nature of the information exerted. The analysis shows that: different types of information impacting exchange rate fluctuations can be detected by the change of exchange rate's conditional entropy.In the final analysis, this paper studies the contemporary and hysteretic relationship among the exchange rate and other macroeconomic variables, based on the separation between the fictitious economy and real economy. The approach dealing with the exchange rate provides a new perspective. The paper also constructs mathematical expression of conditional entropy which is used by detecting different nature of information in the exchange rate market, the method make study quantitatively possible in supervising the market and make it accessible to the stock market's supervision.