| Internationalization of RMB has greatly progressed with the active impetus of Chinese government in the latest years. The exchange rate of RMB fluctuated largely since August of 2015, which interpreted that the subsequent financial risks should not be ignored. To practice monetary policy effectively is the basis of the stable running of economy in one country. It is also the qualification required to stabilize currency value. The existing theoretical analyses and historical experience indicate that:the internationalization of currency can actually bring many challenges to the target and transmission channel of monetary policy. Therefore the author intends to figure out the influence and effect of RMB internationalization on intermediate targets and transmission channels of the monetary policy of our country.Firstly, the author summarized the conditions, costs and benefits of currency internationalization. Afterwards, the author theoretically analyzed the influences of currency internationalization on intermediate targets (including the money supply and the interest rate) and transmission channels (respectively the currency channel and the credit loan channel) of the monetary policy. The result indicates that:the demand on the international currency will increase in the initial stage of currency internationalization, which will lead to the tendency of rise in both money supply and interest rate; in addition, following the liberalization of capital account, the exchange rate and interest rate, the controllability of currency supply amount and interest rate and their relevance to the ultimate target will decrease; the transmission effect of interest rate transmission channel may be weakened. Correspondingly, based on the Mundell-Fleming model in open conditions, the author concluded that the functions of exchange rate transmission channel of monetary policy will strengthen after currency internationalization; since the control of loanable funds becomes harder after the currency is internationalized, the effctiveness of credit loan transmission approach of monetary policy will weaken correspondingly.Then the author operated empirical tests on the influence of RMB internationalization on the intermediate target of China-supply amount of currency of monetary policy and the transmission channel of monetary policy in China(currency and credit loan transmission approaches) based on the above theoretical research. The result indicates that:the flow of cross-border funds brought by Shanghai-Hong Kong Stock Connect program positively influences the supply amount of RMB; the cross-border balance of payments has negative influence on supply amount of currency possibly caused by the enlargement of trade financing. The currency transmission effect of monetary policy weakens with the progress of RMB internationalization. In the aspect of credit loan channel, it is strengthened as approaches of commercial banks to profit change and economic transformation has achieved a lot in the latest years after RMB internationalization.On the basis of comprehensively considering the theory of RMB internationalization and the conclusion of empirical analysis, it is urgent to optimize the monetary policy of our country. At present, the central bank shall further improve the flexibility of monetary policy adjustment and optimize credit loan transmission channel. At the same time, the financial risks caused by RMB internationalization could probably be prevented through cautiously pushing forward the openness of capital account, optimizing the formation mechanism of exchange rate and promoting interest rate liberalization. |
