Author(s)

Xinlei Shi ¹, Xinzhe Liang ¹

Affiliation(s)

¹ School of Accountancy, Hainan Vocational University of Science and Technology, Haikou, 570100, China

Corresponding Author

Xinlei Shi

ABSTRACT

With the trend of economic globalisation and the close economic interaction between China and the rest of the world, the exchange rate as a bridge of economic communication with the rest of the world, to maintain the stability of the exchange rate in international trade is particularly important. However, the current international financial situation is complicated and affected by the novel coronavirus (COVID-19) epidemic, the fluctuation of RMB exchange rate is particularly obvious, which seriously affects the stable development of China and the world economy. Based on this, this paper analyzes the reasons for the fluctuation of RMB exchange rate from three different perspectives: internal state intervention, external interest rate hike by the Federal Reserve and repeated special events of the novel coronavirus epidemic. Analyze the reasons from a more comprehensive perspective. In addition, it not only analyzes the impact of the exchange rate system on exchange rate fluctuations, but also discusses how to develop the exchange rate system in order to better weaken the impact of exchange rate fluctuations. From the perspective of analyzing the new coronavirus epidemic, we further analyze the mechanism of the RMB exchange rate fluctuation from the Keynesian macroeconomic model. Then, from the perspective of China's conditions, this paper innovatively discusses the adverse effects of RMB exchange rate fluctuations on economic development and situation from four aspects: terms of trade, price level, employment and industry, labor productivity and economic structure. Finally, in view of the current economic development situation in China, it is proposed to promote the internationalization process of RMB, improve the exchange rate formation mechanism, and use financial instruments to cope with the frequent fluctuations of the current RMB exchange rate. Based on the above analysis, it is hoped that the RMB exchange rate can be controlled to fluctuate within a reasonable range, constantly promote the internationalization process of RMB, and accelerate the market-oriented development of exchange rate. To provide a foundation for the stable development of the economy.

KEYWORDS

RMB exchange rate, The impact of exchange rate fluctuations, Marketization of exchange rates

CITE THIS PAPER

Xinlei Shi, Xinzhe Liang, Analysing RMB exchange rate fluctuations based on multiple perspectives. Financial Engineering and Risk Management (2024) Vol. 7: 153-158. DOI: http://dx.doi.org/10.23977/ferm.2024.070221.

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