The Analysis Of Spillover Effect Of Exchange Rates RMB Exercting On Asean Currencies

The exchange rate formation mechanism reform of China was carried out in July 2005, and the RMB exchange rate is no longer pegged to the dollar but to a basket of currencies. Since then RMB began to appreciate, and started the internationalization process. The potential problem of the dollar-based was fully revealed in the outbreak of the global financial crisis in 2008, and USD has been facing serious challenges. After the financial crisis, RMB has become increasingly prominent in East Asia, and the regionalization process of RMB will continue to accelerate. RMB joined SDR in December 2015, which will benefit all countries against the USD hegemony, help improve the international reserve currency status of RMB, and help forced process of RMB internationalization. With the rising trading and the growing economic strength, the economic, political and other influence of China is rising in ASEAN, and how to occupy a more favorable position in ASEAN exchange rate cooperation has become an urgent problem. Therefore, the study of the spillover effect of exchange rates RMB exerting on currencies of the ASEAN countries will play a catalytic role in promotion of RMB exchange rate mechanism reform, and be extremely instructive in the process of RMB regionalization and internationalization.The first part of this paper introduces the background, significance and the research achievement of some famous scholars in related fields. The second part is the theory introduction. In this part, the concept, the causes and the mechanism of the spillover effect are introduced. In addition, VAR model, which is used to test the spillover effect, is also explained. The third part mainly comparatively analyzes the influence RMB and USD exert on currencies of the ASEAN countries. These two parts lay the theoretical foundation for the following part. In the fourth part, the empirical analysis is carried on. First, the exchange rate and currency trends of RMB and ASEAN countries are analyzed. Second, the exchange rate fluctuations correlated are further analyzed. Finally, the spillover effects of exchange rate are analyzed by VAR model. The results show that:First, China-ASEAN region is still de facto dollar zone. The relevance between RMB and currencies of the ASEAN countries are strongest before the outbreak of the global financial crisis, and they are next during the financial crisis. The second RMB exchange reform after the financial crisis did not make the relevance between RMB and currencies of the ASEAN countries become much stronger, but a little weaker. Second, the influence of RMB has been reflected. Compared with the first stage, RMB produce spillover effect against more countries in the last two periods, which proves that its status has been significantly improved in East Asia. However, RMB is not yet compete with USD. Third, it is feasible that RMB become a dominant currency in ASEAN region. On the international market, RMB has been showed a strong competitiveness and it has gradually become a border trade payment and settlement media. With the acceptance of RMB being increasing, RMB regionalization will become more and more feasible.In the end, based on the analysis conclusions, the research results of domestic and foreign scholars, and the contact with domestic and international financial status today, the author put forward policy recommendations for RMB regionalization and internationalization.