Study On Currency Mismatch In China

Without unifying the global currency, currency mismatch will be an existing longly andunavoidable phenomenon. Especially in developing countries，Currency Mismatch is a commoneconomic phenomena, which will has a significant effect on the country’s economic and otherareas.This paper firstly adopts ACMAQ to measure the degree of Currency Mismatch in Chinafrom1986to2010, and divide those dates to three stages and get a conclusion of CurrencyMismatch’s developed trend，it’s from slowly growth to steady growth to rapid growth. At thesame time it proposes that the type of Chinese Currency Mismatch is claims-based CurrencyMismatch and mainly centralizes in the official institutions.Then it analyses the cause of china’s debt-based Currency Mismatch by applyingVAR-based Congregation test of Johansen, it concludes that China’s economic growthrate, degree of development of financial markets, the real effective exchange rate, inflation arethe main causes of china’s debt-based Currency Mismatch.Finally, according to the analysis of the text before, it analyses how Currency Mismatch caninfluence China’s exchange rate, monetary policy, the cost of the loss and it raised the policyrecommendations to manage currency mismatch, including perfecting the managed floatingexchange rate system, using fiscal and monetary policy rationally, strengthening management offoreign exchange, vigorously developing the domestic financial market.