Title: Empirical Analysis on RMB Exchange Rate Determinants

Year of Publication: March - 2014
Page Numbers: 46-51
Authors: WU YI , YANG JIN
Conference Name: The Second International Conference on E-Technologies and Business on the Web (EBW2014)
- Malaysia


Within open economy system, the exchange rate is the ratio of converting the domestic currency with the foreign currency, which is manifesting the foreign value of the currency. The change of the exchange rate is mainly decided by the economic development situation of our country. This paper carries on the empirical analysis to the relation of the favorable balance of payments, the monetary aggregates (M2), the RMB deposit interest rate, the commodity retail price index and the RMB nominal exchange rate. By choosing the time series data of each variable time from 1985 to 2012, the paper uses some methods of econometrics to return the data and pass the examination. Then, it draws a conclusion that the favorable balance of payments and the commodity retail price index has a reasonable explanation for the changes on the RMB nominal exchange rate and gets the quantities relation between them.