Interest rate transmission form
1. Internal financial transmission: refers to the interaction and influence of interest rate changes between financial subjects and variables. For example, changes in interest rates will cause changes in capital flows, which in turn will cause changes in exchange rates; Changes in one country's interest rate will cause corresponding changes in other countries and regions.
2. Cross-industry transmission: refers to the interaction and influence of variables and subjects caused by the change of interest rate in the financial industry, and after forming a certain force in the financial industry, it affects other industries, industries and regions through the exchange rate mechanism and price mechanism.
At present, China is still in the transition period, and the degree of marketization is not high, which is mainly manifested as follows: interest rate control leads to interest rates not completely depending on market supply and demand; Compared with developed countries, the interest rate elasticity of consumer demand and investment demand is low; Lack of flexibility of exchange rate; Compulsory settlement and sale of foreign exchange; The capital account has not yet been opened, and international capital flows are limited. These unique institutional factors in the transitional period limit the role of the linkage mechanism between exchange rate and interest rate. In the transmission process of exchange rate and interest rate linkage mechanism, the relationship between some economic variables is weakened to some extent.