RMB Cross-border Flows Research On The Effect Of Monetary Policy

RMB cross-border flowing began from the border trades.Based on the appreciation of the RMB is expected,for the convenience of trade,to avoid the exchange rate to bring the risk of cost changes,Chinese border trade sides gradually RMB dollars as the settlement currency,until Pilot set up in 2009.The RMB cross-border flow has a formal official settlement channels.Since 2009,the scope of the RMB settlement pilot has been expanding.With the implementation of the " The Belt and Road " strategy,the establishment of the FTA and ADB,RMB has entered a stage of rapid development,especially joined in SDR in 2015,its influence in the international community to further enhance.From the settlement currency to the investment currency and then to the reserve currency,RMB's functions continued to enrich.The RMB outflow and return channels are also evolving,the scale of cross-border flow of RMB continue to make new breakthroughs.One part of the outflow of money came back to the country,other part of the overseas accumulation make up the formation of the RMB offshore market.The growing size of the flow and the growing flow of channels have impacted monetary and capital markets,affecting the effectiveness and independence of monetary policy.The outflow channels of RMB cross-border flows mainly include trade settlement,foreign investment and currency swaps.The return channels mainly include offshore market deposits and RMB bonds,and foreign institutions invest in the domestic inter-bank bond market,FDI,RQFII and RMB loans.Chinese capital account is not fully opened,the currency reflow mechanism is not perfect,and the international recognition of the RMB is not enough high constraints.Many reasons resulted in the existence of funding gap between the RMB flow and return and fluctuation of interest rate and exchange rate.It is difficult to monetary policy control,affecting the monetary policy effect.Based on the theory of traditional international capital flow and the current characteristics of RMB cross-border investment and offshore market 's situation,the paper analyzed the current situation of RMB cross – border impact on monetary policy.This paper chooses the monthly data from April 2010 to October 2016 as the sample,and uses the VAR model to test the effect of the monetary policy effect on the cross-border flow of RMB.The effect of the monetary policy on the impact of the cross-Draw the following empirical conclusions.Cross-border RMB capital flows have a direct impact on the money supply,increase the difficulty of monetary policy control.Cross-border RMB funds flow through the money supply,the coastal market interest rates have an indirect impact.Offshore market RMB interest rate volatility is an important factor affecting the flow of RMB cross-border capital.RMB cross-border flows fluctuate with the exchange rate fluctuations in the onshore market,and there is a linkage between the offshore market and the onshore market exchange rate.Combined with theoretical analysis,the RMB cross-border movement is moving in a broader,more smooth direction of continuous development,and with the RMB cross-border flow is constantly open,the impact of monetary policy will be obvious.Therefore,it is proposed to establish an orderly and effective mechanism for RMB cross-border movement and to improve the cross-border flow supervision mechanism,to improve the sensitivity of monetary policy control variables and to strengthen the effectiveness of monetary policy.