Do the RMB exchange rate and global commodity prices have asymmetric or symmetric effects on China’s stock prices?

With the rapid expansion of the RMB exchange rate’s floating range,the effects of the RMB exchange rate and global commodity price changes on China’s stock prices are likely to increase.This study uses both auto regressive distributed lag(ARDL)and nonlinear ARDL(NARDL)approaches to explore the symmetric and asymmetric effects of the RMB exchange rate and global commodity prices on China’s stock prices.Our findings show that without considering the critical variable of global commodity prices,there is no cointegration relationship between the RMB exchange rate and China’s stock prices,and the coefficient of the RMB exchange rate is not statistically significant.However,when we introduce global commodity prices into the NARDL model,the result shows that the RMB exchange rate has a negative effect on China’s stock prices,that there indeed exists a long-run cointegration relationship among the RMB exchange rate,global commodity prices,and stock prices in the NARDL model,and that global commodity price changes have an asymmetric effect on China’s stock prices in the long run.Specifically,China’s stock prices are more sensitive to increases than decreases in global commodity prices.Thus,increases in global commodity prices cause China’s stock prices to decline sharply.In contrast,the same magnitude of decline in global commodity prices induces a smaller increase in China’s stock prices.

RMB Exchange Rate,Overseas Education,and High-Quality Economic Growth

China is transitioning its industrial structure from labor-and resource-intensive industries that previously contributed significantly to the country’s GDP growth to technology-intensive industries emphasizing a highly-skilled workforce and sustainability to achieve high-quality economic growth.This paper examines the impact of the RMB exchange rate on high-quality economic growth through theoretical modeling and empirical analysis and discusses the variable of overseas education to explore the mechanism of how the RMB exchange rate and overseas education jointly impact high-quality economic growth.The research sample includes the National Bureau of Statistics data on education from 1995 to 2015,the Bank for International Settlements(BIS)data on the RMB exchange rate,and the added value of China’s high-quality economic growth estimated based on the national economy data.An empirical analysis of theoretical expectations was conducted,finding that RMB appreciation could make a positive contribution to China’s high-quality economic growth;RMB exchange rate fluctuations would impact the relative cost of overseas education and overseas returnees could have a positive impact on domestic resource utilization efficiency and domestic capacity to make sci-tech innovations,thereby injecting vitality to high-quality economic growth.This study focuses on both the RMB exchange rate and the population studying abroad,providing additional observation dimensions to existing research.

To Accomplish the Unaccomplished Reform： Lessons and Options of RMB Exchange Rate Reform

The exchange rate reform initiated on August 11,2015 is an important attempt by the PBoC to transform China's exchange rate regime from the "crawl-like arrangement" to a floating regime.However,after a three-day experiment,the PBoC abandoned the original goal of the reform.Since then,the central bank has implemented a new exchange rate-setting mechanism.Under this mechanism,the central parity of the renminbi(RMB) against the US dollar is decided by the arithmetic average of the RMB exchange rate that keeps the index of a currency basket unchanged over the past 24 hours and the previous day's closing price of USD/CNY.Due to the introduction of the index of a currency basket,additional uncertainty has been introduced into the determination of the RMB exchange rate,because of the uncertainty of the dollar index(USDX).As a result,to a certain extent,the one-way bet on the RMB expectations is weakened.However,the current exchange rate formation mechanism cannot reverse the trend of devaluation of the RMB,nor can it eliminate depreciation expectations.Meanwhile,it hinders the effectiveness of central bank's independent monetary policy based on the domestic economic fundamentals.And also,the "two-way float" created by the new price-setting mechanism is artificial and has led to significant losses of foreign exchange reserve.The paper explains how the new price-setting mechanism works,and identifies the important features of the mechanism and its pros and cons.The paper argues that despite some advantages,the new exchange rate regime as a soft peg regime is not sustainable and the PBoC should stop foreign exchange market intervention as soon as possible.We hope that the PBoC can learn the lessons from the failure of the "August 11 reform" and accomplish the unaccomplished reform in an urgent manner.

A Study of Relationship between RMB Exchange Rate and Import-Export Trade Relations before and after Exchange Reform

Exchange rate, as a link between international markets, integrates the economies of all countries. In today's economic globalization, exchange rate plays an important role. It is one of the most effective ways to regulate the international economy, and also one of the most direct means. In this paper, based on the definition, classification and role of exchange rate, the impacts of RMB exchange rate on China's export trade after the "exchange rate reform" were studied, and the measures that China should take to deal with the impact of the continuous appreciation of RMB on imports and exports under the current environment were proposed. This paper hopes to further expand China's foreign trade.

The Appreciation Pressure on RMB Yuan and the Adjustment of RMB Exchange Rate Policy

China has maintained RMB exchange rate nearly unchanged since 1998. However, with the relaxation of capital control, a crawling peg, a more flexible RMB exchange rate regime, is inevitable. Based on improving the current formation mechanism of RMB exchange rate, Chinese government could widen the floating band around the central parity; in the long run, switching the peg from USD alone to a basket of currencies may be a better choice.

Exchange rate,discount rate,interest rate and depreciation rate

exchange rate:汇率,外汇汇率,指一个国家的货币和另一个国家的货币的比价。中国人民银行每天公布人民币市场汇价。如:market Exchange Rates in RMB yuan set by the People’s Bank ofChina(September 4,1998)Currency Unit RateUS dollar 100 828.00Japanese yen 100 6.0291German mark 100 478.

The Concrete Analysis of the Change of Import and Export Trade of Chinese Enterprises Is Based on the Perspective of RMB Exchange Rate

The change of import and export trade of Chinese enterprises actually reflects the appreciation and depreciation of RMB,which are closely related to the total volume of import and export trade of Chinese enterprises and the formulation of corresponding foreign exchange measures.Generally speaking,the rise of the RMB exchange rate means the appreciation of the RMB is conducive to imports,while the decline of the RMB exchange rate means the depreciation of the RMB and the decline of the price of export commodities,so it has a greater price advantage and is conducive to exports.Chinese enterprises should correctly grasp the rise and fall of RMB exchange rate and carry out import and export trade reasonably when developing abroad.

Employment and Wage Effects of RMB Exchange Rate for Manufacturing Sectors in China and the US

By creating a labor market dynamic general equilibrium model, this paper derives the pass-through mechanism of exchange rate's employment and wage effects,carries out an empirical study on the employment and wage effects of RMB exchange rate for manufacturing sectors in China and the United States based on ridge regression, and examines the role of industry characteristics in this process. Research findings suggest that: RMB depreciation will drive employment and wage growth for most of China's laborintensive manufacturing sectors, and RMB appreciation will increase employment for certain capital-and technology-intensive sectors; but RMB depreciation has insignificant employment and wage effects for most sectors in the US. Hence, in achieving the longterm stability of RMB exchange rate, China should take advantage of RMB appreciation's manufacturing upgrade effect and ensure the steady growth of manufacturing employment.The US should make breakthroughs in various links of its economic development in order to tackle unemployment, instead of blaming RMB exchange rate. In addition, the nature of business activities and trade union characteristic are both significant factors that lead to differences in inter-sector employment levels of Chinese and US manufacturing sectors.Technology characteristic and other monopolistic characteristics exert decisive effects on the difference of wage return for various sectors in China and the US.

Research on Dynamic Relationship Between Interest Rate&Exchange Rate—Based on the Analysis of Marketization of Interest Rate and Exchange Rate

This paper empirically analyzed the dynamic relationship between interest rate and exchange rate with VAR model and VECM using monthly data from 2008 to 2019.One of the main contributions of this paper is that it concentrated on studying how the marketization of interest rate and exchange rate plays a role in the transmission mechanism between these two rates by dividing the sample into 6 different groups according to the process of the marketization.The results show that there are long-term and short-term equilibrium relationship between interest rate and exchange rate.Also,interest rate could quickly respond to the changes in exchange rate after the marketization,which reflect that the marketization of interest rate is effective in China.However,exchange rate could not effectively respond to changes in interest rate.Thus,the marketization of exchange rate still needs to be improved.In addition,the results show that after marketization,an increase in the interest rate would lead to a decrease in exchange rate now,which could be a reference to the formulation of monetary policies.

Using fuzzy neural networks for RMB/USD real exchange rate forecasting

In order to aim at improving the forecasting performance of the RMB/USD exchange rate, this paper proposes a new architecture of fuzzy neural networks based on fuzzy logic, and the method of point differential, which guarantees not only the direction of weight correction, but also the needed precision for the BP algorithm. In applying genetic algorithms for optimal performance, this approach, in the forecasting of the RMB/USD real exchange rate from 1994 to 2000, obviously outperforms typical BP Neural Networks and exhibits a higher capacity in regard to nonlinear, time-variablility, and illegibility of the exchange rate.

Exchange Rate Risk, Political Environment and Chinese Outward FDI in Emerging Economies： A Panel Data Analysis

This study attempts to investigate the effect of financial and political risk on Chinese outward FDI activities in 56 emerging economies for a period from 2003 to 2013. Exchange rate is taken as a main indicator of financial risks and political risks are evaluated using ICRG （International Country Risk Guide） index. Generalized method of moments with panel data of Chinese outward FDI （foreign direct investment） in new emerging economies is used to find how Chinese finns intend to invest abroad with respect to exchange rate level, volatility, and expectation. The major findings show that RMB appreciation proved to have a positive effect on Chinese outward FDI in emerging economies. But Chinese OFDI （outward foreign direct investment） seems not to respond to exchange rate volatility. The expectation of RMB＇s appreciation has positive effect on Chinese OFDI in emerging economies. Results also show that more political risk leads to more Chinese OFDI in emerging economies.

Modeling and forecasting exchange rate volatility in Bangladesh using GARCH models:a comparison based on normal and Student's t-error distribution

Background:Modeling exchange rate volatility has remained crucially important because of its diverse implications.This study aimed to address the issue of error distribution assumption in modeling and forecasting exchange rate volatility between the Bangladeshi taka(BDT)and the US dollar($).Methods:Using daily exchange rates for 7 years(January 1,2008,to April 30,2015),this study attempted to model dynamics following generalized autoregressive conditional heteroscedastic(GARCH),asymmetric power ARCH(APARCH),exponential generalized autoregressive conditional heteroscedstic(EGARCH),threshold generalized autoregressive conditional heteroscedstic(TGARCH),and integrated generalized autoregressive conditional heteroscedstic(IGARCH)processes under both normal and Student’s t-distribution assumptions for errors.Results and Conclusions:It was found that,in contrast with the normal distribution,the application of Student’s t-distribution for errors helped the models satisfy the diagnostic tests and show improved forecasting accuracy.With such error distribution for out-of-sample volatility forecasting,AR(2)–GARCH(1,1)is considered the best.

Monetary and fiscal factors in nominal interest rate variations in Sri Lanka under a deregulated regime

Background:This paper examines the role of monetary and fiscal factors in interest rate variations in Sri Lanka under its deregulated regime of interest rates.In addition the paper also examines the role of monetary factors in the variation of interest rates,using a quarterly dataset for the post-global recession period,when the exchange rate is determined by market forces.Results:Empirical analysis uses a dataset of nominal interest rates,money growth,income growth,changes in nominal exchange rate,and budget deficit.From the methodological point of view the paper involves vector autoregression model and Wald tests of Granger causality,followed by impulse response analysis while stationarity and the order of integration of the selected variables are confirmed involving the augmented Dickey-Fuller and the Phillips-Perron unit-root tests.Results:The paper confirms that both monetary and fiscal factors have significant effects on the variations of interest rates.Money growth triggers an increase in interest rates,which supports the Fisher equation view,while income growth has a negative impact.Budget deficit causes a rise in interest rates,but the role of the exchange rate is found to be almost insignificant,probably due to including exchange rate series that cover both the pegged and market-based regimes of exchange rates.The second part of the analysis,using a quarterly dataset for the post-global recession period,further establishes the positive impact of M2 money growth and income growth on interest rates.In this case,exchange rate depreciation causes an increase in interest rates.Conclusions:The significant role of monetary and fiscal factors in interest rate variations implies it would be possible to manage interest rates through a judiciary management of monetary and fiscal policies.

Capital Account Openness,Exchange Rate Volatility and Economic Growth:International Experiences and Implications

Based on the Barro classical growth model, this paper introduces capital account openness and exchange rate volatility to conduct an empirical analysis using the panel data of 182 countries(regions) during 1970-2013 to examine the combined effects of capital account openness and exchange rate risks on economic growth. Our findings are as follows:(1) Without considering exchange rate volatility, capital account openness is subject to a threshold effect, i.e. capital account openness significantly promotes the economic growth of middle-and high-income countries but exerts the opposite effect on low-income countries; and(2) after exchange rate volatility is taken into account, the growth effect of capital account openness is reduced and the greater the exchange rate volatility is, the smaller the marginal effect of capital account openness will be; sample-specific results also proved the existence of the threshold effect. This paper offers the following implications:(1) The effect of capital account openness can be better examined based on risk factors;(2) moderately controlling exchange rate volatility is conducive to acquiring greater benefits from capital account openness; and(3) the threshold effect of capital account openness cannot be overlooked.

Impacts of Exchange Rate Volatility and FDI on Technical Efficiency—A Case Study of Vietnamese Agricultural Sector

The objective of this research is to examine impacts of exchange rate volatility and FDI on efficiency of the Vietnamese agricultural sector at the provincial level for the period 1998-2011. Due to the characteristic of high uncertainty in agricultural production, the chance-constrained programming model would be used to estimate efficiency of the agricultural production sector. In order to study impacts of exchange rate volatility and FDI, we employ the two-stage model. In the first stage, we use the chance-constrained programming model to measure technical efficiency and ARIMA model to quantify exchange rate volatility. In the second stage, we use the fixed effect model to evaluate impacts of exchange rate volatility and FDI on efficiency of agricultural production in poor and rich provinces. The estimated results show that fluctuation in exchange rate volatility would reduce efficiency in agricultural production but FDI has an insignificant impact on the efficient production in Vietnam agricultural sector.

The Influence of Bond Market Opening in Trade Field on RMB Internationalization Foreign Exchange Rate

In order to verify that the open bond market is the most direct choice to promote the internationalization of RMB,the empirical analysis method is used to analyze the impact of bond liberalization on the internationalization of RMB foreign exchange rate.Firstly,the data source processing method of empirical analysis is introduced.Then the dynamic panel data regression model and panel threshold model are built to verify the influence factors of RMB internationalization foreign exchange rate and the influence of debt market opening on RMB foreign exchange rate,respectively.The results show that the opening of the creditor's rights market has a significant positive promoting effect on the internationalization of RMB foreign exchange rate,and the development of the domestic creditor's rights market has a significant promoting effect on the internationalization of RMB foreign exchange rate.The study has a certain role in promoting the status of China's currency in the international community.

Effects of sulfur dioxide on growth， gas exchange rate and leaf sulfur content of massion pine seedlings

The effects of sulfur dioxide(SO_2) on the dry weight growth gas exchange rate and leaf sulfur content of massion pine(Pinus massoniana Lamb. )were investigated. The results obtained in this study show that the dry weight growth and net photosynthetic rate of masson pine seedlings are reduced by exposure to SO_2 at ≥100 ppb. From these results,one of the main causes in the dieback of masson pine forest reported in Chongqing,China may be relatively high concentrations of atmospheric SO_2 in the relevant area.

Subprime Mortgage Crisis and the Exchange Rate Channel: Evidence from Six Countries of the Zone Euro-Med

This article proposes to assess the impact of the subprime mortgage crisis on the exchange rate channel in 6 countries of the Euro-Med zone. To do this, our analysis is based on three evaluation methods that allow us to conclude that the exchange rate channel is better evaluated by the non-linear approach of the countries studied. Thus, the depreciation of the exchange rate adopted by the countries of the Med zone did worse macroeconomic stability and economic convergence.

Exchange rate reform:progress,challenges and prospects

For three decades China has followed an incremental approach in renminbi exchange rate reform.During this period,the exchange rate system has gone through five stages of evolution:i) a"basket peg"exchange rate regime;ii) a dual-track system;Hi) exchange rate convergence;iv) a"unitary pegged"exchange rate regime;and v) a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. Reforming the exchange rate formation mechanism is a complex engineering project influenced by numerous factors such as the economic development mode,industrial structure,basic economic system,market system condition,financial and macroeconomic policy system as well as the new advantages arising from opening-up initiatives.Since 2005,China has achieved substantial success in reforming the exchange rate formation mechanism but still faces a plethora of issues.To address these issues,China should strengthen the role of the market in the exchange rate formation process and gradually push for the free convertibility of the renminbi under the capital account.Amidst the raging global financial crisis,China should further adapt to the diversification of the international monetary system and aggressively proceed with renminbi regionalization and internationalization.

Demographic Structure and the Real Exchange Rate:A Study Based on Cross-Country Data

By creating a two-sector intertemporal and intergenerational small open economy model,this paper investigates how real exchange rate responds to demographic shifts in the long term.The result shows that when the capital density of tradable goods sector exceeds that of non-tradable goods sector in a country,an increase in the country's elderly dependency rate(ODR) will cause its real exchange rate to appreciate.In addition,higher savings rate or per capita labor income means that real exchange rate is more responsive to ODR variations.We conducted an econometric test on our theoretical hypotheses using the data of 214 countries and regions during 1980-2013.Empirical result indicates that an increase of ODR will cause real exchange rate to appreciate.This result is robust and unaffected by sample grouping characteristics and differences.An increase in savings rate will significantly increase the ODR elasticity of real exchange rate.This conclusion is also significant and robust for overall samples and categorized samples(except for developed countries) and generally consistent with our theoretical hypothesis.However,our empirical research generally does not support the hypothesis that higher labor income increases the responsiveness of real exchange rate to ODR.This study is of great significance to unravel the effect of China's ageing population on the longterm variations of renminbi's exchange rate.