Game Of The Rmb Exchange Rate Arrangements In The Context Of Capital Flows

Utilizing the method of geometrically weighted averages to design the nominal effective exchange rate of RMB index and real effective exchange rate index to measure international competitiveness of China's trade and commodities, the paper applies correlation and factor analytical tools to investigate the relationship between the international capital inflow and exchange rate regimes in China. The correlation analysis indicates that the relationship between them is significantly positive. In the meantime the results of factor analysis support the conclusion. And then, the paper applies the game theory in finance in order to find the correlation between international capital inflow and effect of exchange rate policies. The central bank may perform an optimum operation based on this theory and greater achievement can be obtained in the management of international capital inflow.