The RMB exchange rate formation mechanism before 1994 was from the founding of New China to the reform and opening up. Under the traditional planned economy system, the RMB exchange rate was strictly managed and controlled by the state. According to the needs of economic development in different periods, before the reform and opening up, China's exchange rate system experienced a single floating exchange rate system (1949 ~ 1952) in the early days of the founding of New China, a single fixed exchange rate system (1953 ~ 1972) in the 1950s and 1960s, and a single floating after the Bretton Woods system.
The Development Course of RMB Exchange Rate System
1. Early transition to market economy (1979- 1993)
The first stage is the coexistence of RMB internal settlement price and official exchange rate (198 1 ~ 1984). Before the reform, the RMB exchange rate was lower than the export cost for a long time, but higher than the ratio of domestic and international consumer prices. In order to expand exports, RMB needs to depreciate, but RMB depreciation is not good for non-trade foreign exchange income. Considering the needs of both trade and non-trade, in August19811,the government decided to implement the internal settlement exchange rate of trade outside the official exchange rate, that is, add a certain profit to the national average export exchange cost, which is obviously lower than the official exchange rate.
The second stage is to cancel the internal settlement exchange rate and enter the period of coexistence of official exchange rate and foreign exchange swap market exchange rate (1985 ~ 1993). The dual exchange rate system has obviously mobilized the enthusiasm of export enterprises, and the national foreign exchange reserves have also increased. However, there are obvious problems in this arrangement: First, from the perspective of foreign relations, the IMF regards the dual exchange rate as a government subsidy for exports, and developed countries threaten to levy a subsidy tax on China's exports. Second, from the domestic point of view, the dual exchange rate has caused confusion in foreign exchange management, and it cannot effectively curb imports when the foreign trade department is still eating the same pot. Therefore, the internal settlement price was cancelled from 1985 65438+ 10 1, and the RMB returned to a single exchange rate.
In order to cooperate with the reform of foreign trade and the implementation of contract system, China has gradually abolished financial subsidies, increased the proportion of foreign exchange retention from 1988, generally established foreign exchange adjustment centers, and liberalized the adjustment of market exchange rates, thus forming a situation in which official exchange rates and market exchange rates coexist.
2. The period of socialist market economy (1994 to present)
First stage
Exchange rate integration and the period of managed floating exchange rate system (1994 ~ July 2005). The overall goal of the national foreign exchange system reform from 65438 to 0994 is to "reform the foreign exchange management system, establish a single and managed floating exchange rate system based on market supply and demand, unify and standardize the foreign exchange market, and gradually make RMB a convertible currency". Specific measures include, first, a single and managed floating exchange rate system based on market supply and demand. 1994 65438+ 10/month 1, the official RMB exchange rate and foreign exchange swap price will be merged. Second, implement the system of bank settlement and sale of foreign exchange, cancel the retention and settlement of foreign exchange. Third, establish a unified and standardized inter-bank foreign exchange trading market in China. The central bank manages the RMB exchange rate by participating in this market transaction, and the exchange rate announced by RMB is the exchange rate formed by this market. 1996 12 China has realized the convertibility of RMB under current account, which is an important step to realize the free convertibility of RMB.
After 1994, China implemented a managed floating exchange rate system based on market supply and demand, but the nominal exchange rate of RMB against the US dollar remained relatively stable except for a slight appreciation from 1994 to 1995. After the Asian financial crisis, the China government further narrowed the floating range of RMB exchange rate because the decoupling of RMB from the US dollar may lead to RMB appreciation, which is not conducive to export growth. During the period of 1999, the IMF also changed the classification of China's exchange rate system from "managed floating" to "fixed peg system pegged to a single currency".
stage Ⅱ
On July 2, 2005, China reformed the RMB exchange rate formation mechanism. The RMB exchange rate is no longer pegged to a single dollar, but several major currencies are selected to form a basket of currencies, and the changes of the RMB multilateral exchange rate index are calculated with reference to the basket of currencies. We will implement a managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies. Since the reform of RMB exchange rate formation mechanism, on the basis of market supply and demand, the RMB has generally appreciated slightly. On July 2, 2005, after the reform of RMB exchange rate formation mechanism, the People's Bank of China announced the closing price of RMB against USD and other trading currencies in the inter-bank foreign exchange market on that day after the market closed every working day, as the middle price of RMB trading on the next working day. 65438+From April 4th, 2006 10, the People's Bank of China authorized China Foreign Exchange Trading Center to announce the central parity of RMB against USD, EUR, JPY and HKD at 9: 00 every working day as the central parity of spot foreign exchange market (including off-site and matchmaking methods) and bank counter trading exchange rate. To keep the RMB exchange rate basically stable at a reasonable and balanced level, the smooth implementation of the new RMB exchange rate system fully proves that "a managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies" conforms to the initiative, controllability and gradual requirements of China's exchange rate reform. The RMB exchange rate will remain basically stable at a reasonable and balanced level based on market supply and demand and with reference to a basket of currencies.