Research on the Equilibrium Exchange Rate of the Renminbi Market and the Actual Equilibrium Exchange Rate

Author: Zhao Dengfeng
Publisher:
Publish Date: 2005-09-16
Features: Maintaining a certain flexibility while ensuring relative stability in the exchange rate is the direction of China's exchange rate system reform. Under the current conditions where the RMB exchange rate has deviated from its equilibrium level and faces upward pressure, China's exchange rate formation mechanism reform should focus on gradually achieving capital account convertibility while returning to a managed floating exchange rate system. Gradual capital account convertibility and gradual exchange rate flexibility mutually promote each other, ultimately achieving a managed floating exchange rate system that combines full capital account convertibility with basic stability and moderate flexibility.