Asymmetric effects of Federal Reserve monetary policy on RMB foreign exchange market pressure

Asymmetric effects of Federal Reserve monetary policy on RMB foreign exchange market pressure


Author: Jin Chunyu,Zhang Long  Journal:Finance & Economics  Date:2017(4)

Keywords The Federal Reserve; the Renminbi; the foreign exchange market pressure;

Abstract

The study found that: (1) the Fed's monetary policy has asymmetric effect on the RMB exchange market pressure in a region, the Fed's monetary policy RMB appreciation pressure on the foreign exchange market with ease, big influence, short time delay and fluctuation in the region; two, the Fed's monetary policy RMB appreciation pressure on foreign exchange the market has a role in promoting, the influence degree of small, long delay, low volatility. (2) in a district system, affect the Fed's monetary policy on the RMB exchange market pressure is mainly conducted through the interest rate, the people's Bank of Chinese should be wary of the Fed's tightening of monetary policy and the impact of the appreciation pressure on the RMB Chinese financial market, the implementation of higher interest rates and reduced money supply parallel tightening of monetary policy and sell foreign exchange assets is the best monetary policy. (3) in district two, affect the Fed's monetary policy on the RMB exchange market pressure is mainly conducted through the price, the people's Bank of China should be wary of the Fed's tight monetary policy on the RMB devaluation pressure and impact Chinese price system, the implementation of higher interest rates and reduce the money supply parallel tightening of monetary policy and buying foreign exchange assets is the best monetary policy.


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