In the previous macro-control policies, interest rate policy was at the core. From the relationship among interest rate, inflation rate and exchange rate, it is mainly through the fluctuation of interest rate to adjust the internal and external balance relationship represented by exchange rate and inflation rate, that is, when the inflation rate rises, the internal demand will be greater than the supply, which will lead to the corresponding trade deficit and the depreciation of the local currency. So when the inflation rate rose in the past, the exchange rate was in the opposite direction, that is, it would depreciate. On the one hand, raising interest rates can curb the rise of domestic aggregate demand, thus curbing domestic inflation; On the other hand, it can also curb domestic demand, curb imports and promote exports, thus enhancing the exchange rate of the local currency. Therefore, when raising interest rates has an effect on tightening aggregate demand and reducing inflation rate, the local currency exchange rate will rise.

However, in the new era of globalization, RMB has depreciated internally and appreciated externally in China, that is, the inflation rate and exchange rate have changed in the same direction. In this era, if we continue to use the previous macro-control theories and tools, we will certainly not get the previous results.

First, from a rational point of view, in the new era of globalization, because China has been integrated with the international economy, and previous analysis also shows that the growth of China's trade surplus and the appreciation of RMB exchange rate are long-term trends, which will attract a large number of international "hot money" to speculate on RMB appreciation, while the cost of international hot money is the local currency interest rate of hot money, and the yield is the sum of RMB interest rate and exchange rate, so the increase of RMB interest rate will also increase the yield of hot money, so the increase of RMB interest rate will not only reduce international hot money. Under the current foreign exchange management system, the central bank purchases foreign exchange with the base currency, which will lead to the growth of the base currency and the increase of the money supply. The purpose of the central bank's interest rate hike was originally to achieve the purpose of tightening aggregate demand by curbing the money supply. However, due to the increase of hot money inflow, the base money put in is forced to rise, so raising interest rates has become a macro-policy effect to stimulate the money supply. As the interest rate hike attracts more foreign exchange inflows, the result of raising the local currency exchange rate has not changed, but because of the larger money supply, it is counterproductive for the purpose of curbing inflation.

Second, from an empirical point of view, raising interest rates has not received the expected results. Since March 2007, the central bank has raised interest rates six times, but the inflation rate rose to a 10-year high of 6.9% in 165438+ 10, and the growth rate of broad money M2 also increased from last year's165438+15.

Some people think that the main reason for the influx of international hot money last year was not the central bank's interest rate hike, but the sharp rise in China's capital market, such as the stock market and real estate prices. I think this judgment is wrong, because after the central bank raised interest rates six times last year, the proportion of international hot money inflows in new foreign exchange reserves increased significantly. If FDI plus trade surplus is regarded as legal foreign exchange inflow, the sum of FDI and trade surplus accounted for 74% of new foreign exchange reserves in 2003 ~ 2006, but in the first nine months of 2007, the proportion dropped to 63%, down by more than 10 percentage point. Obviously, the rise in the proportion of hot money is synchronized with the rise in the interest rate of RMB.