The Impact Of Economic Policy Uncertainty On The Fluctuation Of Rmb Exchange Rate

With the gradual reform of the RMB exchange rate formation mechanism,the flexibility of RMB exchange rate expands gradually.And the influencing factors of the RMB exchange rate fluctuations are increasingly complex.Among them,the economic policy is an important factor in determining exchange rate fluctuations.In the case of world economic integration,dependencies between national economic policies and the influence degree are also deepened,and exchange rate fluctuations are more affected by policy uncertainty.In terms of the impact of economic policy uncertainty on exchange rate fluctuations,there are few studies at home and abroad.Based on related research,this paper explores the influence of economic policy uncertainty of the world's major economies on the RMB exchange rate fluctuations.In theoretical research,this paper explains the direct and indirect influences of economic policy uncertainty on exchange rate,thereby grasping the relationship between economic policy uncertainty and exchange rate fluctuations more accurately.In empirical research,the period of RMB exchange rate fluctuations is divided into three stages since 2005,and the VAR model is constructed to test the impact of economic policy uncertainty on RMB exchange rate respectively.This paper mainly draws the following conclusions.From a macro perspective,in order to deal with the adverse economic impact,the world's major economies will frequently change economic policies to stimulate economic development.China's economic policy will be affected by the external policy uncertainty,thereby causing the RMB exchange rate fluctuations through interest rate,money supply and other channels indirectly.From the micro perspective,the increase of external economic policy uncertainty will directly affect the investors' anticipation of the exchange rate fluctuations,causing the exchange rate fluctuated.In addition,through empirical analysis we found that,with the reform of RMB exchange rate formation mechanism deepened,the impact of economic policy uncertainty on the devaluation of the RMB gradually increased.In view of the above conclusions,this paper puts forward policy recommendations to maintain the RMB exchange rate stable.First,make forward-looking and initiative economic policy.Second,improve policy transparency and ensure the continuity and stability of the policy.Third,gradually improve and perfect the exchange market,increase the two-way floating flexibility of RMB,strengthen international economic and financial cooperation,and push forward the RMB formation mechanism reform steadily.