Countermeasures And Effects Of Marketization Of RMB Exchange Rate Regime

On July 21, 2005, China carried out the reform of RMB exchange rate regime. Since then, we switched to the managed floating exchange rate regime, which is based on the supply and demand of market, with reference to a basket of currencies. The reform significantly enhances the flexibility of RMB exchange rate regime. After that, RMB is no longer pegged to the US dollar, meanwhile, the supply and demand of market and changes of exchange rates of the currencies in the basket are important references. The reform marks the official start of the marketization of RMB exchange rate regime. So far, the new exchange rate regime has been operating for more than two years. So it is meaningful to research the practical effects of it and how to promote its further marketization. At first, this thesis analyzed the development process of the marketization of RMB exchange rate regime, then, it researched the practical effects of the new regime empirically, and the reasons for the results are also given, at last, it suggested some countermeasures for the further marketization of RMB exchange rate. The whole thesis consists of five chapters. They go as follows:Chapter one, introduction. This chapter focuses on the following aspects: the background, intention and significance of choosing the marketization of RMB exchange rate as the study subject; the concerned studies at home and abroad; the train of thought and research methodologies and some innovations of this study.Chapter two, concerned theories about exchange rate and exchange rate regime. Firstly, it defines"exchange rate"and"exchange rate regime"; secondly, it analyzes the factors influencing the exchange rate and the exchange rate's impacts on economy; lastly, it analyzes factors influencing the extent of marketization of exchange rate regime.Chapter three, the process of marketization of RMB exchange rate regime. It divides the whole process into three stages, then it analyzes the characteristics of RMB exchange rate regime and the trend of RMB exchange rate during each stage.Chapter four, the effects of marketization of RMB exchange rate regime. It analyzes the real effects of the marketization of RMB exchange rate regime since July 2005 with empirical method, including the impacts on the export and import trades, foreign direct investment, foreign exchange reserves and monetary policy independence. Then, through the creation of econometric models, it analyzes the impacts of RMB exchange rate fluctuations on export and import trades since July 2005, which is the most important innovation in this thesis.Chapter five, countermeasures to the marketization of RMB exchange rate regime. They includes the following aspects: improve the foreign exchange market, open up capital projects, speed up the reform of interest rate mechanism, expand the exchange rate floating range, improve the market maker system and afford related conditions and measures.