This paper measures the degree of currency substitution in China since the exchange rate reform in July 2005, and compares it with the data of RMB devaluation in the 1990s. It is found that the degree of anti-currency substitution in the process of appreciation is lower than that in the depreciation period. The reason for this is that the economic agent holds a large amount of local currency assets, and the marginal loss caused by the devaluation is greater than the marginal benefit of the appreciation. According to the expected theory of behavioral economics, the economic agent is more sensitive to the loss than the income, which result that the degree of currency substitution is asymmetric and there are significant differences in characteristics. In view of this, in order to prevent the potential currency substitution from deepening the impact on financial and economic in the long run, it is necessary to improve the rate of effective yield of local currency held by economic agent, and to maintain sustainability of economic development and the coherence of policy.

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