First, the trend of the dollar has become a direct factor affecting the short-term change of the RMB exchange rate;
Since the RMB exchange rate is determined by reference to a "basket of currencies", its exchange rate against the US dollar is greatly influenced by the overall performance of the US dollar in the international money market. Looking back at several large fluctuations in the trend of RMB exchange rate, it is not difficult to find that the fluctuation of US dollar in the international exchange market has almost become the main factor determining the short-term trend of RMB exchange rate. Whenever the dollar falls to a new low in the international exchange market, the RMB exchange rate will hit a new high. Once the dollar rebounds, the RMB exchange rate will be adjusted back.
Second, the irrational expectation of RMB appreciation;
First of all, these studies assume that China's current institutional arrangements and policies will remain unchanged. On the contrary, China is a transitional economy country, which is in a critical period of rapid institutional change and major adjustment of development strategy and policy. These institutional and policy variables have greatly affected the actual equilibrium exchange rate level. After the introduction of the new system and policy, the RMB equilibrium exchange rate will be very different from the previous equilibrium exchange rate, so it is obviously inappropriate to use the past to prove the future. Secondly, these studies only consider the basic factors of commodity market and ignore the factors of financial system, whether using purchasing power parity estimation or based on the requirements of international balance of payments.
Third, the pressure of high growth of foreign exchange reserves;
The sustained high growth of China's foreign exchange reserves and the scale beyond the normal level are pregnant with great risks, among which the exchange rate loss alone is shocking. The reasons for China's huge foreign exchange reserves are various and extremely complicated. The persistent surplus of China's current account and capital account is the main reason for the sustained high growth of China's foreign exchange reserves in recent years.
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