| As the internationalisation of the RMB and the process of capital account opening gradually, the exchange rate will gradually strengthen its influence on China’s real estate as the important factors of affectting both the domestic and foreign markets asset allocation efficiency. Because interest rates ofour country is not fully market-oriented, Quantitative regulation of monetary policy has dominated for a long time. The money supply showed a greater endogeneity. Money supply is affected has a greater volatility as transmission channels between exchange rates and domestic real estate market. In 2014, with changes in domestic and international economic environment, the RMB exchange rate showed a tendency to float bilaterally. For the first time the exchange rate devaluation appears after years of keeping the appreciation trend. At the same time the trend of the national real estate prices is the downward. The downward trend of the national real estate prices and the exchange rate devaluation is basically the same, with the same trend. There is an inherent contradiction between exchange rate stability and price stability. With the gradual improvement of China’s financial system and monetary policy transmission channel matures, the relationship between monetary policy and the real estate market become more closely. The research for the relevance between real estate market and monetary policy play a positive role in maintaining our financial system stability. And Research of relevance between monetary policy and the real estate market is important for monetary policy to play an active role and to maintain the financial stability. In this context, research for the linkage mechanism of the RMB exchange rate and real estate prices, linked channels, as well as the relative strength of the linkage channel, will be able to get a clear way to weakening the linkage of the RMB exchange rate and real estate prices, providing new ideas and new ideas for the country’s macro-control policies.This paper reviews and summarizes the domestic and foreign’ scholars research on the interaction of exchange rate and real estate prices, money supply and real estate prices and the exchange rate and real estate prices, building the theoretical framework of the linkage between RMB exchange rate, the money supply and real estate prices.Based on the analysis of the present situation, analyze the correlation between RMB exchange rate, the money supply and real estate prices. Finally, taking the real complex economic situation into account and the non-linear trends presented by the fluctuations of RMB exchange rate, the money supply and real estate prices, it is likely to show a non-linear dynamic relationship between RMB exchange rate and real estate prices through the domestic money supply channels. The paper constructed a MSVAR model to make an empirical analysis of the interaction between exchange RMB exchange rat, domestic money supply and real estate prices after the reform of Exchange rate system.In this paper, on the basis of the empirical analysis and theoretical analysis of interaction between the exchange rate, the domestic money supply and real estate prices concluded that:(1) in the sample period, MSVAR model fits better than the linear model, It captures the interaction between the exchange rate’fluctuation,the domestic money supply ‘fluctuation and real estate price’ fluctuation has changed for five times in the two economic state.It gives the exact time of each state transition occuring;(2) The model show the direction and extent of the correlation between the RMB exchange rate, money supply and real estate prices in different states have changed. The results show that the money supply channels, the RMB exchange rate appreciation promote real estate prices significantly affected, in the phase of big economic fluctuations; in the smaller stage of economic fluctuations, the effect was not significant. Also, no matter what the economy is in the state, through money supply channel, rising real estate prices will lead to a slight devaluation of the RMB exchange rate.(3) The key of the regulation of real estate prices lies in strengthening the independence of monetary policy and weakening the effect of conduction of money supply channel between the exchange rate and real estate prices. |
