The Time-varying Analysis And The Interrelationship Between The Exchange Rate Of China And The United States And The International Oil Price

China’s economic development is an important engine of economic development of the world,with the demand for energy increasing day by day.China has become the world’s largest crude oil importer and the second largest energy consumer.Although the huge oil import and consumption,China lacks the right of oil pricing for a long time,so that the impact of international crude oil price shock on China cannot be ignoredThe U.S.dollar is the main pricing currency in the international oil market.At the same time,the U.S.is also one of the major oil importing countries.The exchange rate of US dollar has been closely linked with the international oil price,and after years of research by scholars at home and abroad,fruitful results have been obtained.However,due to the existence of the US dollar pricing system of oil trade,the disadvantages of single currency pricing gradually enlarge,which makes the world economy suffer a huge impact.Oil producing countries are also trying to apply a diversified pricing system to avoid over concentration of risk on the U.S.dollar After China’s reform and opening up,especially after the "811" exchange rate reform in 2015,the process of RMB internationalization has been accelerating,the exchange rate of RMB has been continuously liberalized,the signing of currency swap agreements with international oil producing countries has been increasing,the RMB has joined the SDR,and the establishment of China crude oil futures exchange has promoted the increasing proportion of RMB in foreign exchange reserves in the world.The functions of pricing and settlement in international trade have been strengthened continuously,and the willingness and confidence of all countries in the world to accept RMB have been strengthened.Exchange rate of RMB has an increasingly significant impact on the international oil marketTherefore,the paper aims to study the two-way effects of exchange rate of RMB and international oil price by comparing with the relationship between exchange rate of U.S.dollar and international oil price from the perspective of the source and the time-varying relationship of differentiated international oil price.Using the monthly data from January 2002 to February 2019 to apply the time-varying parameter vector autoregressive model,and learning from Kilian(2009),according to its determinants,the international oil price is divided into three types:aggregate supply oil price,aggregate demand oil price and oil specific demand shocks oil price.The results show that:first,there are different correlations between the international oil price formed by different driving factors and the exchange rate of RMB and the US dollar Second,the impact of international oil price fluctuations caused by demand factors on the exchange rate of China and the United States is strongly time-varying in the degree and direction.Thirdly,the influence of exchange rate of RMB on international oil price has been significantly improved,and its significance and direction are obvious.According to the third conclusion,with the continuous development of RMB’s influence,a new policy has been opened for "Petroleum RMB",a monetary instrument,to influence the international oil price in the direction that is conducive to the increase of China’s share of global welfare.At the same time,it also provides a way for developing countries to develop and maintain the stability of international oil prices,as well as conditions for maintaining their own interests in the future persistent trade friction between China and the United StatesAccording to the results of theoretical and empirical analysis,this paper suggests that when China adopts the corresponding exchange rate policy according to the fluctuation of international oil price,we should consider the causes of its fluctuation;we should accelerate the construction of RMB crude oil futures market,improve the risk hedging mechanism,promote the expansion of RMB pricing and settlement range,and enhance the pricing power of China’s oil;we should optimize the energy structure,and reduce the burden of oil import.