Exchange rate system, also known as exchange rate arrangement, is a system widely adopted by countries to determine the exchange rate between their own currencies and other currencies. It is a systematic stipulation made by countries or the international community on the principles, methods, ways and systems for determining, maintaining, adjusting and managing exchange rates. The exchange rate system has a great influence on the exchange rate decision-making of various countries. Reviewing and understanding the exchange rate system can make us have a deeper understanding of exchange rate fluctuations in the international financial market. According to the range of exchange rate fluctuation, exchange rate system can be divided into fixed exchange rate system and floating exchange rate system.
Fixed exchange rate system refers to a relatively stable exchange rate system based on the standard currency itself or the legal gold content. Different monetary systems have different fixed exchange rate systems.
Floating exchange rate system refers to the exchange rate system that a country does not stipulate the gold parity and exchange rate fluctuation boundary between local currency and foreign currency, and the monetary authorities no longer undertake the obligation to maintain the exchange rate fluctuation boundary, and the exchange rate floats freely with the change of supply and demand in the foreign exchange market. This system has existed for a long time in history, but it really became popular after the collapse of 1972 dollar-centered fixed exchange rate system. A. principles and basis for determining exchange rates. For example, based on the value of the currency itself or the value of the legal representative.
B. methods of maintaining and adjusting exchange rates. For example, whether to adopt the method of openly and legally appreciating or depreciating, or let it float in a limited way or official intervention. C. decrees, systems and policies governing exchange rates. For example, the provisions on exchange rate and its scope of application in foreign exchange control in various countries.
D institutions that set, maintain and manage exchange rates, such as the safe and the foreign exchange stabilization fund Committee. In the history of international finance, there have been three exchange rate systems, namely, the fixed exchange rate system under the gold standard system, the fixed exchange rate system under the Bretton Woods system and the floating exchange rate system.
(1) Fixed exchange rate system under the gold standard.
1880- 19 14 during the past 35 years, major western countries adopted the gold standard system, that is, gold coins with a certain color and weight were used as the currency in circulation, and gold coins could be freely cast, freely exchanged and freely imported and exported. Under the gold standard, the exchange rates of the two currencies are determined by the ratio of their respective gold contents-gold parity. For example, the gold content of a pound is 1 13.05438+05 green, and the gold content of a dollar is 23.22 green.
1=113.4438+05/23.22 = USD 4.8665.
As long as the gold content of the two currencies remains unchanged, the exchange rates of the two currencies will remain stable. Of course, this fixed exchange rate is also affected by the supply and demand of foreign exchange and the balance of payments, but the fluctuation of exchange rate is limited to the golden point. The gold delivery point refers to the border where gold is exported or imported from a country due to exchange rate fluctuations. The highest limit of exchange rate fluctuation is coinage parity plus transportation fee, that is, the gold export point; The lower limit of exchange rate fluctuation is the coinage parity minus the transportation fee, which is the gold import point.
When a country's balance of payments is in deficit and the foreign exchange rate rises above the gold export point, it will lead to gold outflow, reduced currency circulation, deflation and falling prices, thus improving the competitiveness of commodities in the international market. Output increases and input decreases, which leads to the balance of international payments; On the other hand, when there is a surplus in the balance of payments, the foreign exchange rate falls below the gold input point, which will lead to the inflow of gold, the increase of currency circulation, the rise of prices, the decrease of output and the increase of input, which will eventually lead to the recovery of the balance of payments. Due to the role of gold delivery point and price, exchange rate fluctuation is limited to a limited range, which plays the role of automatically adjusting the exchange rate, thus maintaining the relative stability of the exchange rate. In the 35 years before the First World War, the exchange rates of the United States, Britain, France and Germany never fluctuated.
19 14 When World War I broke out, countries stopped importing and exporting gold, and the gold standard disintegrated. Between the First World War and the Second World War, the currencies of various countries basically failed to abide by a universal exchange rate rule and were in a state of chaos. The 35 years of the gold standard system is the "golden age" for the prosperity of liberal capitalism. The fixed exchange rate system ensures the security of international trade and credit, facilitates the accounting of production costs, avoids the exchange rate risk of international investment, and promotes the development of international trade and international investment. However, the strict fixed exchange rate system makes it difficult for countries to implement favorable monetary policies according to the needs of their own economic development, which greatly restricts economic growth.
Characteristics of exchange rate system under the gold standard;
It is an international monetary system centered on the US dollar. The exchange rate system of this system is pegged to the exchange rate system.
A. Gold has become a solid material basis for the exchange rate determination of the two countries.
B. The exchange rate only fluctuates about 6‰ above and below the coinage parity, which is very small.
C exchange rate stability is maintained automatically, not artificially.
(2) The fixed exchange rate system under the Bretton Woods system.
The fixed exchange rate system under the Bretton Woods system can also be said to be a fixed exchange rate system centered on the US dollar. The Bretton Woods system began in July 1944. The Bretton Woods system established international monetary cooperation institutions (the International Monetary Fund and the International Bank for Reconstruction and Development, also known as the World Bank, were established in 1945 and 12), which stipulated the exchange rate system that countries must abide by and the measures to solve the imbalance of international payments, thus determining the international monetary system centered on the US dollar.
The exchange rate system under the Bretton Woods system is generally a "double-linked" system in which the US dollar is linked to gold and other currencies are linked to the US dollar. To sum up, the fixed exchange rate system under the Bretton Woods system is essentially an adjustable pegged exchange rate system, which has the characteristics of fixed exchange rate and flexible exchange rate, that is, the exchange rate should remain stable in the short term, similar to the fixed exchange rate system under the gold standard system; However, when a country's balance of payments is fundamentally unbalanced, it allows adjustment at any time, which is similar to the flexible exchange rate.
197 1 On August 5, 2000, US President Nixon announced the depreciation of the US dollar and suspended the exchange of the US dollar against gold, and the Bretton Woods system began to collapse, although the 10 group reached the Smithsonian agreement in June of 5438+097 12, announcing the depreciation of the US dollar from 1 oz. The exchange rate parity range expanded from 1% to 2.5%, but by February of 1973, the dollar depreciated for the second time, and European countries and other major capitalist countries withdrew from the fixed exchange rate system one after another, and the fixed exchange rate system completely collapsed.
The disintegration of the fixed exchange rate system is mainly caused by the contradiction between supply and demand of US dollars and gold reserves. The exchange rate parity between currencies is only a reflection of the world economic situation in the early postwar period. With its strong economic strength and gold reserves, the United States overvalued the dollar and underestimated gold. With the economic recovery and rapid development of Japan and Western Europe, the hegemonic position of the United States has been declining, and the dollar disaster has aggravated the deterioration of gold supply and demand. In particular, the United States has continuously increased currency issuance to develop its domestic economy and cope with the balance of payments deficit caused by the Vietnam War, making the dollar far below the parity of gold, making the official price of gold more and more the wishful thinking of buyers. In addition, speculators in the international market seized the disintegration trend of the fixed exchange rate system and made huge bets on gold by borrowing dollars, further increasing the oversupply of dollars and the excess demand for gold. In the end, the US gold reserve faced a crisis of exhaustion and had to abandon the dollar gold standard, which led to the complete collapse of the fixed exchange rate system.
Basic contents of exchange rate system under Bretton Woods system;
Implement a "double peg", that is, the US dollar is linked to gold and the currencies of other countries are linked to the US dollar. B. On the basis of "double pegging", the International Monetary Fund stipulates that the exchange rates of national currencies against the US dollar can generally only fluctuate within the range of exchange rate parity +- 1%, and countries must cooperate with the IMF and take appropriate measures to ensure that exchange rate fluctuations do not exceed this limit.
Because this exchange rate system is "double-linked" and has little fluctuation, it can be adjusted appropriately, so it is also called a fixed exchange rate system centered on the US dollar or an adjustable pegged exchange rate system. (adjustable hook system)
Characteristics of exchange rate system under Bretton Woods system;
A. The exchange rate is determined on the basis of gold parity, but the issuance of currency has nothing to do with gold.
B the fluctuation range is small, but it still exceeds the upper and lower limits stipulated by the gold delivery point.
C. There is no automatic stabilization mechanism for exchange rate, and the fluctuation and range of exchange rate need to be maintained by artificial policies.
D. the central bank stabilizes the exchange rate through indirect means rather than direct control.
E the boundary between exchange rate parity and exchange rate fluctuation can be changed when necessary, but the range of change is limited.
The role of exchange rate system under the Bretton Woods system;
Generally speaking, the adjustable pegged exchange rate system has played a positive role in coordinating and supervising foreign economies, especially the adjustment of exchange rate policies and international payments, and avoiding devaluation "competition" similar to that in the 1930s, and has played a positive role in the economic growth and stability of post-war countries.
Defects of exchange rate system under Bretton Woods system;
A due to the inflexibility of exchange rate changes, its adjustment to the balance of payments is quite limited.
B. cause destructive speculation.
C. The United States is overwhelmed and the "double hook" foundation is affected.
(3) floating exchange rate system
Managed floating exchange rate system for adjustment
Generally speaking, since March 1973, the fixed exchange rate system centered on the US dollar has ceased to exist in the global financial system and has been replaced by a floating exchange rate system.
Most countries that implement floating exchange rate system are major industrial countries in the world, such as the United States, Britain, Germany and Japan. Most other countries and regions still implement the pegged exchange rate system, and most of their currencies are linked to the US dollar, Japanese yen and French franc.
After the floating exchange rate system is implemented, the legal gold content of currency or the parity of paper money with gold in other countries will not play any role. Therefore, the national exchange rate system tends to be complicated and market-oriented.
Under the floating exchange rate system, countries no longer stipulate the fluctuation range of exchange rate, and the central bank no longer undertakes the obligation to maintain the upper and lower limits of fluctuation. The exchange rate is the result of self-fluctuation and adjustment according to the foreign exchange supply and demand in the foreign exchange market. At the same time, the change of foreign exchange supply and demand caused by a country's balance of payments situation is the main factor affecting the exchange rate change-in countries with surplus balance of payments, foreign exchange supply increases, foreign currency prices fall, and exchange rates float downward; In countries with balance of payments deficits, foreign exchange demand increases, foreign currency prices rise and exchange rates rise. Exchange rate fluctuation is a normal phenomenon in the foreign exchange market. A country's currency exchange rate rises, which means currency appreciation and falls, which means depreciation.
It should be said that the floating exchange rate system is an improvement of the fixed exchange rate system. With the continuous reform of the global international monetary system, the International Monetary Fund (IMF) revised the terms of "IMF" on April 1. 0978 and took effect, and implemented the so-called "managed floating exchange rate system". Because the new exchange rate agreement gives countries great freedom in the choice of exchange rate system, countries implement various exchange rate systems, including separate floating, pegged floating, elastic floating and joint floating.
A. single floating. It means that the exchange rate of a country's currency is not fixed with any other currency, and its exchange rate is determined according to the supply and demand of foreign exchange in the market. More than 30 countries, including the United States, Britain, Germany, France and Japan, float independently.
B. peg the float. A currency of one country keeps a fixed exchange rate with another currency and fluctuates with the fluctuation of the latter. Generally speaking, a country with unstable currency can curb its inflation and improve its currency credibility by pegging to a stable currency. Of course, the adoption of the pegged floating model will also make the country's economic development subject to the economic situation of the pegged country, thus suffering losses. There are more than 100 countries or regions in the world that adopt the pegged floating system.
C. elastic float. It means that a country can freely float and peg the exchange rate within a certain elastic range according to its own development needs, or adjust the exchange rate according to a set of economic indicators, thus avoiding the defect of pegging the floating exchange rate and gaining more autonomy in foreign exchange management and monetary policy. More than a dozen countries, such as Brazil, Chile, Argentina, Afghanistan and Bahrain, adopt flexible floating mode.
D. joint floating. Refers to the national group to implement a fixed exchange rate for the internal currencies of member countries and a joint floating exchange rate for the currencies outside the group. Eu11country 1979 establishes the European monetary system and the European monetary unit (ECU). The currencies of various countries are linked to it, establishing exchange parity and forming a parity network. The fluctuation of national currencies must be controlled within the prescribed range. Once the warning line of exchange rate fluctuation is exceeded, the countries concerned should intervene in the foreign exchange market. 199 1 year, the EU signed the Maastricht Treaty and drew up the process table of European monetary integration. 199 1 day, the euro was officially launched and the European monetary integration was realized. Regional monetary groups like the European Union have emerged.
In the process of global economic integration, the dollar used to dominate the world in international finance, but now it is developing towards multipolarization. The international monetary system will develop towards the trend of free floating exchange rate, diversification of international reserves, financial liberalization and internationalization.
4. Innovative application of exchange rate system-Hong Kong linked exchange rate system.
Hong Kong linked exchange rate system 1
In the history of Hong Kong, various monetary standards and exchange rate systems have been implemented. 1842 to 1935 are silver labels; 1935 to 1972 are the exchange standards for pounds; From July 1972 to June 1974+065438+ 10, a fixed exchange rate system was implemented, and the Hong Kong dollar was pegged to the US dollar (1 US dollar to HK$ 5.65); 1974165438+1October1983 65438+1October to implement a free floating exchange rate system; The linked exchange rate system has been implemented since June 1983. The coexistence of linked exchange rate and market exchange rate, fixed exchange rate and floating exchange rate is the most important mechanism of Hong Kong's linked exchange rate system.
Accurately speaking, the linked exchange rate system is a currency board system. According to the currency board system, the flow and stock of the monetary base must be fully supported by foreign exchange reserves. In other words, any change in the monetary base must be consistent with the corresponding change in foreign exchange reserves. The important pillars of the linked exchange rate system in the Hong Kong Special Administrative Region include Hong Kong's huge official reserves, a sound and reliable banking system, a prudent financial philosophy and a flexible economic structure.
The implementation of the linked exchange rate system has profound political and economic reasons.
Hong Kong linked exchange rate system II
1982 In September, China and Britain formally started negotiations on the future of Hong Kong. Due to the slow progress of the initial negotiations, rumors, floating people's hearts, the collapse of the real estate market, the Hong Kong dollar continued to depreciate. In the meantime, people from all walks of life in Hong Kong repeatedly called on the Hong Kong government to come forward to save the Hong Kong dollar, but the British authorities in Hong Kong evaded it for various reasons. 1September 24, 1983, the Hong Kong dollar plummeted in the foreign exchange market, and the exchange rate against the US dollar approached 1: 10, and the exchange rate index of the Hong Kong dollar also plummeted to the lowest level in history of 57.2. In such a severe situation, the British authorities in Hong Kong had to abandon the principle of total non-intervention in the money market and accept the suggestion of economist Greenwood to establish a floating exchange rate system linked to the US dollar.
In short, the exchange rate level, like the price of any other commodity, is determined by the relationship between supply and demand. If a country feels that its currency exchange rate is too high, then as long as it prints more of its own currency and puts it on the market, the supply will increase, and its price, that is, the exchange rate, will naturally come down. Therefore, it is easier for the government to devalue its own currency, but it can't appreciate it entirely by subjective will, because the government needs foreign exchange to support its exchange rate. 1997- 1998 during the Asian financial crisis, Indonesia, South Korea, etc. Finally, they had to devalue their currency because they didn't have enough foreign exchange reserves. The linked exchange rate system is to ensure that there are enough foreign exchange reserves to support the fixed exchange rate in advance and that the relationship between supply and demand will be automatically adjusted to the fixed exchange rate level in order to achieve balance.
To do this, first of all, when issuing the currency of this country or region, the amount cannot exceed its own foreign exchange reserves. For example, the Hong Kong government finally fixed the exchange rate of the Hong Kong dollar at around 1 USD to HK$ 7.8, that is, for every HK$ 7.8 issued, there must be at least a corresponding 1 USD reserve. This can ensure that there will not be enough dollars to buy at a fixed exchange rate when a large number of Hong Kong dollars are thrown out. Due to the enlargement of the financial system, although the Hong Kong government may only issue a certain amount of Hong Kong dollars, the actual amount of funds in the market, plus the amount of bank deposits, will greatly exceed this figure. Therefore, the US dollar reserves of the HKSAR will exceed the actual amount of Hong Kong dollars.
In daily operation, once the demand for US dollars increases and the Hong Kong dollar depreciates, the Hong Kong government will use its US dollar reserves to buy Hong Kong dollars to maintain a fixed exchange rate. At this time, with the deepening of buying Hong Kong dollars, there are fewer and fewer Hong Kong dollars in the market, and the cost of obtaining Hong Kong dollars is getting higher and higher, that is, the interest rate of Hong Kong dollars is getting higher and higher. At the same time, the sharp rise in interest rates will eventually make investors feel that it is better to switch to Hong Kong dollars to get low interest rates than to switch to US dollars. On the contrary, when the demand for Hong Kong dollars increases and the pressure of appreciation arises, the government will sell Hong Kong dollars to buy dollars, which reduces the demand for Hong Kong dollars and increases the demand for dollars.
The implementation of the linked exchange rate system has quickly stabilized the Hong Kong dollar. For more than a decade, Hong Kong's linked exchange rate system has been challenged many times. During this period, it experienced 1987 global stock market crash, 1990 Gulf War, 199 1 the collapse of international commercial banks, 1992 European exchange rate mechanism storm, 1995 Mexican currency crisis and/kloc-. Hong Kong dollar has an outstanding reputation and is firm and stable. At the same time, Hong Kong's economy is running well, and its status as an international financial center, international trade center and international shipping center is constantly consolidated and strengthened. All these have played an important and indelible role in the linked exchange rate system.
For Hong Kong, due to the characteristics of its typical export-oriented economy, the economy is highly dependent on foreign countries, and foreign investment and foreign trade account for a large proportion in the economy. Therefore, the growth of local economy is often influenced and restricted by various unpredictable and uncontrollable external factors. In this case, the Hong Kong dollar is pegged to the US dollar, which stabilizes the exchange rate, reduces a lot of foreign exchange risks in international trade and economic life, and is conducive to the conclusion of various long-term economic and trade contracts and the collection of international capital, thus bringing more benefits and opportunities to Hong Kong. These can also be said to be the internal roots that lead to the emergence and persistence of the linked exchange rate system.
It can be seen that the linked exchange rate system can regulate the market and stabilize the exchange rate at a fixed level, but at the same time, we should also see that the linked exchange rate system also has its disadvantages. Because the government pays special attention to the relationship between supply and demand in the foreign exchange market, its currency quantity is not completely affected by the relationship between supply and demand in the market. For example, during the Asian financial crisis, the Hong Kong dollar was hit by speculative funds, and under the influence of the linked exchange rate system, the interest rate of the Hong Kong dollar soared. It also affects real estate, finance and other industries, but it is difficult for the Hong Kong government to stimulate the economy by cutting interest rates like other countries or regions, because its interest rate level is determined by the foreign exchange market, so the linked exchange rate system is quite strict and inflexible, which is not suitable for every country or region.
Therefore, Hong Kong's linked exchange rate system also has its own defects.
(1) makes Hong Kong's interest rate and money supply subject to the interest rate policy and monetary policy of the United States, thus seriously weakening the adjustment ability of these two economic levers.
The linked exchange rate system is also considered to be the main reason for the coexistence of high inflation and negative interest rates in Hong Kong.
Because of the linked exchange rate, it is impossible to adjust the balance of payments by means of exchange rate, and so on.
However, despite its shortcomings, Hong Kong's linked exchange rate system has a deep and solid economic foundation, and history has affirmed its role in stabilizing the economy and the market. At the same time, after more than ten years of wind and rain, this system itself is becoming more and more perfect.
The chronology of RMB exchange rate since the founding of the People's Republic of China (1949-1952 is converted at floating exchange rate, 53-7 1 year is 2.462) year1971973197419741975/kloc- Kloc-0/.91.8595438+0.945438+0.81.865438.2320198565438+0 98666/kloc.2008.200000000005