The Study On The Effectiveness And Mechanism Of Exchange Rate Communication

With the deepening of monetary policy theory research and the independence and transparency of central banks,exchange rate communication has become a new monetary policy tool to enter the line of policy implements.More and more developed countries use this tool to carry out the economy.Regulation and intervention.Since July 2005,China has implemented the reform of the RMB exchange rate formation mechanism.After the intermational financial crisis and the "811" exchange rate reform,the marketization of the RMB exchange rate has continued to deepen.The development of the foreign exchange market has continuously raised the demand for the People’s Bank of China to control the exchange rate.In this context,China’s monetary authorities began to use exchange rate communication to regulate the exchange rate.This paper takes the exchange rate communication as a logical starting point for the significant validity of the exchange rate,and systematically sorts out the relevant literature and theoretical basis on the effectiveness and channel of exchange rate communication.By clearly defining exchange rate communication and establishing identification criteria,the concept of exchange rate communication is regulated,and the effectiveness of exchange rate communication is measured by quantitative methods.In the theoretical part of the exchange mechanism of exchange rate communication,this paper elaborates the research mechanism of signal channel from the macroscopic point of view and the cooperation channel from the micro-structure concept,and on this basis,empirically analyzes the transmission channel of China’s exchange rate communication.This paper examines the effectiveness of central bank exchange rate communication from the perspective of long-term and short-term,and conducts short-term validity test on central bank exchange rate communication based on interest rate parity theory.Based on the elastic monetarism model,it conducts long-term validity test on central bank exchange rate commnunication.Empirical studies have found that the impact of exchange rate communication on the RMB exchange rate is effective in the short-term and long-term,and can produce desirable results in the foreign exchange market,so it can be used as a monetary policy tool alone.In terms of the channel of exchange rate communication,the cooperation channel can significantly affect the direction of the RMB exchange rate toward the central bank’s desired direction,and the signal channel does not have a significant impact on the RMB exchange rate.