RMB Exchange Rate Decision In The Process Of Convertible Under The Capital Account

At the end of 1996, RMB can Convertible under the current account, so following that,RMB Convertible under the capital account became a hot research to the theorists. In view ofthis, wrote this paper, and hope that through this would deeper my knowledge on theexchange rate and the convertible under the capital account, and possibly give my opinions onthe China's current exchange rate reform.This article is divided into three chapters. Chapter I introduced the conception ofconvertible under the capital account, and introduced other developed and developingcountries' open capital projects, and then pointed out that an appropriate and stable exchangerate level is important in the process of successful convertible under the capital account ofRMB. Chapter II made a research on reasonable level of the exchange rate in the process ofcapital account convertibility: describes the relationship between the RMB exchange rate andcapital projects, interest rates and exchange rates, Finally used the interest rate factors toamended the "wage costs exchange rate theory", and this providing a new approach to studythe reasonable exchange rate level in the process of convertibility under the capital account ofRMB. In Chapter III, gave the basic mechanisms as market mechanisms and policymechanisms to stable the exchange rate level: Stable economic growth, price levels, interestrates;Flexible exchange rate arrangements;Reasonable foreign exchange market intervention;regulation and control on currency market interest rates, and so on.