The Empirical Analysis On The Phenomenon Of China's Currency Mismatch

As an economic phenomenon, currency mismatch refers to a situation that an economic entity's net assets or net income are sensitive to the changes of the exchange rate, when its assets / liabilities or revenues / expenditures are denominated in different currencies. It is a phenomenon that exists in emerging market ubiquitously.China is also facing this difficult problem, but until recently has been extensively concerned by theorists. The reason for this is that, before the exchange rate system reform in 2005, China actually implemented the fixed exchange rate system, the fixed exchange rate made the currency mismatch risk not appearing.It enter the eye of people till the reform of the RMB exchange rate formation mechanism led to more flexible exchange rate.And it impacts the central bank as well as plenty of mirco economic entities.Currency mismatch will cause tremendous harm to the macroeconomic and the currency mismatch risk will be from potential to reality.It is of significance to study this phenomenon on the formulation of financial policy during the process of reforming the exchange rate system and deepening finance system in China.Yet research on this problem in our country is at the initial stage.The subject investigated in this paper is currency mismatch stock of national-level, used both the theoretical analysis and the empirical analysis, both the qualitative analysis and the quantitative analysis,comparative analysis. First, summarizing the research situation of currency mismatch, from three aspects: the connotation, the reasons of causing, and the measure method systems. On this basis, estimated the currency mismatch degree of China, through the aggregate effective currency mismatch index introduced by Goldstein and Turner and the aggregate currency mismatch absolute quantity index introduced by Zhu Chao, analyzed the characteristics and the economic impact according to the reality and situation of currency mismatch in China. Do this like that will truly present the currency mismatch problem situation of China. Then qualitatively studied the influencing factors of currency mismatch in China, and used the Engle-Granger two-step method in order to inspect the long-term relation between the currency mismatch and its reasons. The result of positive test indicated that:the size of country's economy,the level of the financial marketand so on are significantly correlated with the degree of the China's currency mismatch.Lastly,we analyze the mechanism of influence between these factors and currency mismatch and give some suggestions on the conclusions.