Impact of renminbi exchange rate expectation on China's foreign exchange reserves: an empirical analysis Online publication date: Thu, 23-Oct-2014
by Jiancheng Du; Jiaoju Ge; Jin Qiao
International Journal of Sustainable Economy (IJSE), Vol. 6, No. 4, 2014
Abstract: Compared with the previous researches giving scattered and qualitative discussions about the exchange rate expectation China's foreign exchange reserves (FER), this paper conducted an empirical research by adding the exchange rate expectation. Starting from the evolution path of RMB exchange regime, two methods was used to examine the impact of expectation of RMB exchange rate on China's FER. The first method was based on the rational expectation theory. Firstly, the sequence of rational expectations of RMB exchange rate was generated, after which combined the sequence with other major macroeconomic indicators as a whole to examine their effects on FER in different periods. In the second method, the indicator of NDF was directly used and the next step was the same as method one. Both of the results based on the two different methods mentioned above indicated that the change of expectation of RMB exchange rate positively correlated to FER.
Online publication date: Thu, 23-Oct-2014
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Sustainable Economy (IJSE):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email email@example.com