Appreciation Of The RMB And Influence On China’s Commercial Banks

The changes of exchange rate influence a country’s economic life significantly, especially in the economic globalization modern society. The exchange rate changes will not only affect one country foreign trade, but also of more significance in one country macroeconomic. Under the background of the RMB appreciation, it is the fact that the change of the exchange rate performances as currency appreciation and depreciation. Exchange rate changes on all aspects of economic impact and role is different, the most important is the exchange rate for the balance of trade, price levels, capital movement, foreign exchange reserves, fiscal revenue, income distribution and the impact of international economic relations. The financial industry as a pillar industry of the country, but also a very weak industry, is vulnerable to shocks.In2008, the U.S. subprime mortgage crisis affected the global economy. But in this case, China’s commercial banks still grow in many areas and a huge increase of asset size is also evident.2009, China’s commercial banks ICBC, China Construction Bank and Bank of China plays in the first global bank rankings to third.So what the exactly impact of the RMB exchange rate changes on China’s commercial Banks will be?The study on base the real appreciation of the RMB, this paper here aims to introduce some main reasons for appreciation of the RMB (China’s economic growth, balance of payments surplus, foreign exchange control policy and exchange rate control policy). Analysis will focus on the impact of exchange rate, foreign exchange liquidity risk, business operation and risk management of China’s commercial banks in the situation of the appreciation of the RMB. Research on the exchange rate risk is mainly reflected in three types of exchange rate risk, transaction risk, conversion risk and economic risk respectively. Transaction risk is mainly from foreign exchange risk exposures on analysis, including VaR, the way of measuring the risk of foreign exchange exposure and the measure of profit and loss in the foreign exchange exposure. And then from the aspect of the deposits and loans of commercial banks, analysis the impact of the appreciation of the RMB on the foreign exchange liquidity risk China’s commercial banks. Furthermore, the impact on business operations is mainly in the credit business and intermediary business, including the influence of international settlement of commercial banks. Then describe the effect on the commercial banks to foreign exchange derivatives trading from the development in the foreign exchange derivatives market and trading risk. Then with the opportunities and the challenges for commercial banks, explain the financial management of the business impact. Finally, based on the above analysis and other advanced countries, such as the United States, Japan, put forward the coping strategies of Chinese commercial banks. The specific content includes a sound foreign exchange risk management, optimization of the foreign currency portfolio allocation and actively responds to the credit risk to develop financial services.