| Exchange rate is the price of foreign exchange dealing, whose essence is the ratio of two different currencies. The exchange rate regime is one country's institutional arrangement for determining and adjusting exchange rate. As playing a significant role in the economic system, the exchange rate regime influences the growth and stability of national economy profoundly. Since 2003, the international society's focus on the exchange rate of RMB has resulted from not only the suspicion of its rationality, but also the level of the rate. How to choose a rational exchange rate regime based on our country's economic development and whether the level of the rate is undervalued severely have become two especially critical and practical problems.Having compared and analyzed western equilibrium exchange rate theories, the paper choose Elbadawi's developing country models as theoretic guidance,and carefully selects economic factors related to RMB equilibrium exchange rate,uses modern econometric tools and methods such as OLS, and compute RMB equilibrium exchange rate. The variables in the model include openness,capital net inflow,ratio of government expense to GDP,ratio of balance of trade to GDP. The computation shows that in the 1980s RMB exchange rate is often overvalued, since 1990s RMB exchange rate is often undervalued.The paper analyzed the position of RMB facing,then draw the conclusion that in recent years, RMB exchange rate is actually undervalued,but the degree of undervaluing is not terrible, though RMB exchange rate has the anticipation of appreciation,the adjustment of RMB exchange doesn't mean paranormal adjustment. The current exchange regime is propitious to balanced and gradual adjustment of RMB exchange rate. At the same time of adjustment of RMB exchange rate, it is the same importance that we should change the economic increasing mode and develop Chinese financal market as soon as possible... |
