A Study On The Relationship Between RMB And Hong Kong 's Offshore Market Exchange Rate

In 2009, two Renminbi markets were created. RMB onshore market in mainland and offshore market in Hong Kong, showing "a currency, two markets" situation. This paper studies the relationship between Renminbi exchange rate onshore and offshore market in Hong Kong, and analyzes the offshore CNH market after Hong Kong, as well as information to guide changes between RMB and foreign exchange markets.Due to the different RMB exchange rate formation mechanism onshore and offshore market in Hong Kong, the RMB exchange rate against U.S. dollar are different, and leads to a question in identifying the dominant role in RMB exchange rate determination. This paper analyzes onshore and offshore market exchange rate formation mechanism, followed by data analysis graphical methods onshore Hong Kong offshore RMB market situation and, further emphasis on the exchange rate between the two markets related to the method of quantitative analysis empirical research. Empirical Analysis of the results showed that after the CNH market partially replaced guiding role in the onshore spot market for onshore forward market, while the Renminbi offshore market position in the Information Center has gradually begun to appear.Finally, according to RMB foreign exchange market development status, Chinese authority should focus on the construction of proposed onshore RMB market, accelerate the exchange rate market and promote the realization of the process of capital account convertibility process; emphasis on the development of offshore RMB market; to further improve on-shore forward market and other recommendations to promote a comprehensive, balanced and healthy development of China’s foreign exchange market.