A Research On Formation Mechanism Of Renminbi Exchange Rate

Exchange rate regime is a significant part of national economy; even then the correct one will ensure the development and growth of countries. Since the year of 1994, Renminbi exchange regime is recognized as the pegged exchange rate regime, and that create the favorable conditions for the 10-years great progress of Chinese economy. However, along with the increasing of the scope in china being open to the outside world, china have being in harmony with system of world economy more deeply, yet in the meanwhile national economy will encounter inevitably the instability of international financial market, including a variety of impacts. Under the circumstance, the validity of pegged exchange rate reform will fall under the austere challenge. Therefore, it is more pressing and necessary to reform and adjust the institutions of pegged exchange rate. In 2005, the reform of Reminbi exchange rate institutions became the hottest problem. In July 21, central bank of China declared the exchange rate between Reminbi and U.S. dollar rise 2% and changed its mechanism from U.S. dollar pegging to managed float institution that consult to monetary basket. So-called consulting to monetary basket means according to close relationship between trade and investment, one country choices some main currencies, and different currencies set different weights, then consists on the a having float scope basket currencies. Before the reform of institution of exchange rate, many scholars have brought forwarded their attitude and suggestions in theory and practice. But it is the beginning of the reform. Because of its mechanism is not perfect, the exchange rate reformation did not reached its final aims. In this situation, exchange rate regime will adjust someday.This article mainly based on the opening economic background, focused on the in elasticity of fixed exchange rate institution and Chinese economy, to discuss the necessary of the reformation of exchange rate institutions and influence of the reformation to mirco-mainbody in Chinese economy, and bravely predicated basic direction of the reformation.This article divided into VI parts. Part I evaluates the develop path of evolution of exchange rate institution after Chinese reformation and opening to the world. Part II brings the international economic background on which exchange rate regime choice relies, and analysis's several factors effecting on exchange rate choice. Part III gives us the definition and conception, which include varieties of scholars' academic round-up, and gives the mathematic mechanism of currencies basket. Applying for the model, Part IV analyses the causation of Chinese basket currencies formation and concrete mechanism. Part V discusses on the possible influence about national exchange rate regime. At last, we deeply talk about Chinese reform will contribute to Asian financial reform and Asian currency integration, and construct the matching-up regulations for exchange rate targeting zone.Despite shifting of exchange rate regime, we still will meet some problematic situations in reality. Obviously, these have not addressed our national problems. In the periods of from setting out pegged exchange rate to floating managed exchange rate regime, we work on how to make our exchange rate regime more perfectly? And how to transit to real floating exchange rate? All of these problems further need our research.