The Analysis About The Influencing Factors Of Exchange Rate In The Process Of RMB Internationalization

Since the 21 st century,in order to conform to the development trend of economic globalization,China has continuously expanded its opening to the outside world,and actively engaged in multi-faceted economic and financial cooperation with all countries in the world.With the development of foreign trade,the liquidity of the RMB in the international community has also been improved.In July 2009,China officially launched the cross-border RMB settlement.It's the beginning of the RMB internationalization process,and then into the rapid development period.On October 1,2016,the RMB was officially incorporated into the SDR.The degree of internationalization was improved further.At present,during the process of the internationalization of the RMB,in the face of the more open international market,the exchange rate fluctuates continuously,and the impact on the macro economy is increasing day by day.Therefore,how to clarify the influencing factors of the exchange rate in the process of internationalization is essential to China's economic development.Based on this,this paper analyzes the current situation of internationalization of RMB and the characteristics of exchange rate fluctuation from the traditional exchange rate theory.And then based on the essence that the supply and demand of foreign exchange affect the exchange rate,this paper analyzes the exchange rate influencing factors from the balance of payments,capital markets,and the domestic economy.Mainly including cross-border RMB settlement,foreign direct investment,domestic and foreign spreads.Then use the relevant data to analyze its impact on the exchange rate through the empirical test.At the same time,as for the event of RMB joining the SDR,using the incident research method,this paper measured its impact on the exchange rate.The results show that in the process of internationalization of RMB,the scale of cross-border RMB settlement,foreign direct investment and exchange difference are the main reasons that lead to the appreciation of RMB.While the money supply,the central bank increased foreign exchange are the main devaluation factors.In addition,with the RMB joining the SDR,in short term,this event didn't cause significant fluctuations in the exchange rate,but with the expansion of the event window,the influence continues to strengthen.Finally,based on the conclusion of the research,this paper puts forward some policy suggestions on the exchange rate management under the background of RMB internationalization.