What rebateforex Forexrebateforyoudonesia the Forex rebate for you highestrebateforex target zone double-layer monitoring model Considering the superiority of Krugmans exchange rate target zone theory as well as the infeasibility in practice, it was modified getforexrebate the exchange rate fluctuation range was layered, as shown in the following figure: where the first level is the free floating range, such as the range S0 ~ S1 in the figure, the government does not intervene in the exchange rate; the second level is the monitoring intervention zone, the range is S0 ~ and ~, the government monitors according to the established monitoring indicators. range is half of the free floating range, such as S0 ~ and ~ in the figure, the government monitors according to the monitoring indicators established; the dashed lines S0 and S1 are soft intervention lines, which the government does not disclose to the public, and if the exchange rate touches S0 and S1, government intervention is very unlikely;, the two dashed lines are hard intervention lines, which the government discloses to the public, and if the exchange rate is close to these two lines, the government its intervention is very likely; the last point is that The central exchange rate is adjusted according to the magnitude of 1/2ΔB, so that the new exchange rate target zone and the original exchange rate target zone reappear overlapping policy implications and working principle of the two-tier monitoring model of exchange rate target zone 1, policy implications The two-tier monitoring model of exchange rate target zone through the stratification and establishment of monitoring targets, in addition to obtaining the honeymoon effect (hollymooneffects) of the Krugman model and reduce the volatility of the exchange rate and other policy 1) By establishing a free floating band, the central bank does not need to intervene in the movement of the exchange rate within the zone, thus increasing the independence of monetary policy and thus acting against the headwinds of the domestic economic cycle 2) As the width of the exchange rate fluctuation band is greater than zero, the central bank gains monetary policy independence, while the nominal anchor of the exchange rate disappears to a certain extent, leaving speculative capital without a 3) Since the target intervention zone is half the range of the free floating zone, the readjustment of the central exchange rate will make the range of the new exchange rate target zone overlap with the range of the original exchange rate target zone, thus avoiding the jump of the exchange rate 4) More efficient allocation of foreign exchange resources In the free floating zone, the generation of exchange rate is mainly determined by the supply and demand relationship The equilibrium exchange rate determined by supply and demand satisfies the principle of marginal cost equals marginal benefit, thus making the allocation of foreign exchange resources more efficient. The design of the exchange rate target zone system is consistent with the gradual opening path of Chinas financial market. By monitoring the state of these four indicators, we can distinguish whether it is a monetary shock or a real shock, so as to decide whether the central bank will intervene to offset or change the central exchange rate of the target zone When the exchange rate is in the monitoring and intervention zone, if the interest rate exceeds the monitoring indicator for a long time, it indicates that the shock is a monetary shock, the central exchange rate remains unchanged, and the central bank intervenes to offset. Accordingly, when the exchange rate is in the monitoring intervention zone, if the inflation rate exceeds the monitoring target for a long time, it indicates that the shock is a real shock, the market exchange rate is misaligned, and the central exchange rate is adjusted by 1/2ΔB; when the exchange rate is in the monitoring intervention zone and the interest rate and inflation rate exceed the monitoring target at the same time, it is necessary to compare the size of the loss function of the central bank and then decide what measures to take Through the above analysis we can see that The two-tier monitoring model of the exchange rate target zone has the function of automatically finding the equilibrium exchange rate, thus avoiding exchange rate misalignment, thus stabilizing investment and trade demand and promoting the development of our foreign economy In fact, the operation of the two-tier monitoring model of the exchange rate target zone also requires us to strengthen fiscal discipline, implement prudent fiscal and monetary policies, and reduce the central banks ability to finance fiscal deficits The complementary two-tier monitoring model of the exchange rate target zone Policy measures For the two-tier monitoring model of exchange rate target zones to function properly, we must also improve the corresponding supporting policy measures, because exchange rate policy itself is only a part of macroeconomic policy and must be used in coordination with other macroeconomic policies to achieve the intended policy goals. First, we must strengthen regional monetary cooperation; second, we must improve the construction of the market system and remove the institutional factors that hinder the flow of factors; finally, we must strengthen market supervision to create an orderly external environment for the two-tier monitoring model of exchange rate target zones. Theoretically, in a two-country exchange rate model, if two countries join forces to defend against speculative attacks, the likelihood of success is very high The double-layer monitoring model of the exchange rate target area depends on the coordination and cooperation of regional monetary policy in order to work well. In 1999, Malaysian Prime Minister Mahathir proposed the establishment of an "East Asian Monetary Fund", which led to the "Chiang Mai Motion" signed by 10 ASEAN countries, China, Japan and South Korea in May 2000. The Chiang Mai Initiative decided to gradually expand the range of countries participating in bilateral swap agreements consisting of the original 10 ASEAN countries. This form of cooperation (using swaps and repurchases for emergency assistance to countries in crisis) has become the de facto institutional basis for Asian monetary cooperation East Asian economies all have large foreign exchange reserves, and by the end of 2003, Chinas foreign exchange reserves amounted to $403.3 billion, Japans to $673.5 billion, Taiwans to $206.6 billion, Koreas to $155.4 billion, and Hong Kongs to $118.4 billion. This also provides a solid foundation for the operation of the two-tier monitoring model of the exchange rate target area 2, reform the system that hinders the flow of factors of production, the formation of the internal dynamic mechanism of economic development One of the advantages of the two-tier monitoring model of the exchange rate target area is that it can find the equilibrium exchange rate by itself; however, the premise of this function is that the market exchange rate can fluctuate around the equilibrium exchange rate, the money market, the capital market and the commodity market can smoothly The current economy in China has structural problems, and many systems that affect the rational allocation of resources still exist, which is contrary to the inherent requirements of a market economy. For example, we should vigorously promote the market-oriented reform of the RMB interest rate, because interest rate control is prone to adverse selection and moral hazard, thus forming financial constraints and financial repression. mechanism tends to be perfect; we must also abolish the system that affects the free flow of labor, such as the household registration system to establish the exit mechanism of state-owned enterprises and state-owned financial mechanisms, and through the reform of the property rights system, solve the problem of high risk and low efficiency of state-owned enterprises and state-owned financial institutions; establish and improve the free entrepreneurship system, which is a fundamental task of Chinas economic reform, in fact, the soundness of the free entrepreneurship system is not only an incremental In fact, a sound free enterprise system is not only an incremental reform, but also the most important part of the market-oriented comprehensive economic reform and the formation of the intrinsic driving mechanism of economic development, as well as the best complement to the policy of poverty alleviation and the fundamental way out 3. To this end, China should firstly relax the market access conditions and cultivate mature and diversified market players; secondly, increase the variety of foreign exchange market transactions, including two aspects, one is to increase the currency of foreign exchange market transactions, and the other is to develop the RMB futures and futures markets in order to hedge financial risks. Again, sound foreign world trading methods, China should consider the development of commercial banks market maker system, and promote large amount of agency transactions, which can activate the foreign exchange market and make the exchange rate truly respond to the expectations of market participants, thus making the price signal of the exchange rate stronger; finally, improve the RMB exchange rate formation mechanism, change the compulsory settlement and sale of foreign exchange to willing settlement and sale of foreign exchange, thus making the foreign exchange market clear effectively and forming a balanced exchange rate 4. Strengthen market supervision The role of the two-layer monitoring model of the exchange rate target area also depends on effective market supervision, the exchange rate system cannot replace prudential supervision of the financial system The practice of the East Asian financial crisis has proved that in todays globalization, the lack of effective supervision and disorderly liberalization will provide opportunities for international speculators to make waves and magnify the original risks in the financial system; and the external speculators triggered by the Therefore, in order to make the two-layer monitoring model of the exchange rate target area work properly, we must first closely monitor our balance sheet to avoid a serious mismatch of currencies and maturities Second, we need to improve the monitoring system, improve the monitoring and early warning system, improve regulatory efficiency and control market risks. Again, vigorously rectify and regulate the foreign exchange market order timely grasp and accurately analyze the inflow of foreign exchange funds and trends in balance of payments movements, crack down on all kinds of illegal foreign exchange transactions and illegal cross-border capital flows, and prevent the influx of short-term speculative capital into our country; finally, improve the coordination mechanism between market regulators the necessity and steps of RMB implementation monitoring area China, as a rapidly developing emerging market economy, has dual economy structure is obvious; at the same time, after joining the WTO, China is facing complex economic shocks, which may be both internal or external shocks and monetary or real shocks; all these require our exchange rate policy to play the role of a nominal anchor while maintaining the independence of monetary policy in order to cope with the complex economic situation The two-layer monitoring model of the exchange rate target zone maintains both the exchange rate as a At the same time, the two-tier monitoring model also has the function of automatically finding the equilibrium exchange rate, which is very important for the reform of Chinas exchange rate system. Of course, the reform of the RMB exchange rate system must be carried out in a sequential manner, and the RMB exchange rate must follow certain steps in the process of changing to a flexible system 1. For example, in 2003, Chinas total import and export trade with major economies as a percentage of Chinas total imports and exports were: U.S.: 14.8%; EU: 14.7%; Japan: 15.7%; Hong Kong: 10.3%; ASEAN: 9.2%; Korea: 7.4% The single pegged dollar exchange rate system only stabilized Chinas However, since the U.S. dollar, the Japanese yen and the euro float independently of each other, the single peg to the U.S. dollar makes the nominal trade-weighted exchange rate (nominal effective exchange rate) of the RMB fluctuate frequently, which is not conducive to the stable development of Chinas foreign trade and investment So, in order to stabilize the real effective exchange rate of the RMB, the RMB must be pegged to a basket of currencies, and as for the choice of currencies in the basket, it can be based on ABC rule, choose the currency of Chinas major trading partners, the weight of each currency is consistent with their trade ratio 2, expand the floating range of the RMB exchange rate to implement a two-tier monitoring mechanism of the exchange rate target area China as a large developing country, the economic cycle is difficult to keep in line with other countries, which requires China to maintain the independence of monetary policy; however, due to the imperfection of Chinas financial market, China is also impossible to In this case, we must increase the flexibility of RMB exchange rate, one of the ways is to increase the floating range of RMB exchange rate, and at the same time, we must set upper and lower limits for the fluctuation of the exchange rate to limit its excessive fluctuation, so China should implement a double-layer monitoring mechanism of exchange rate target area. Because of our special national characteristics, large geo-economic differences and obvious dualistic economic structure, the main goal of our monetary policy is to achieve internal equilibrium, so we should adopt inflation rate as the monitoring indicator. At present, China has achieved free convertibility under the current account, but foreign exchange transactions under the capital account are still under strict control. Open up the financial sector, that is, our economy will be more affected by the global economic cycle, our financial management system must be reformed accordingly to adapt to the new international situation In the long run, capital account control is not an effective means, it is not conducive to our economy to use the two resources and two markets at home and abroad, that is, it does not enable the effective allocation of resources in the international context, therefore, China should According to the development trend of our economy, China has the strength to support the free convertibility of RMB, realize the leap of RMB to the unipolar - free floating exchange rate system, and finally establish the market mechanism in China 4、Implement the internationalization of RMB The full convertibility of the RMB is to the full free float of the RMB is not our ultimate goal, but at best a stage goal In fact, there are many fully convertible currencies in the world, for example, the currencies of Eastern Europe such as Bulgaria and Estonia and some countries in Latin America are fully convertible, but because of their economic strength, their currencies are left out Carlos et al. ( CarlosArtetaetal., 2001) empirical results show that there is no correlation between currency convertibility and economic growth Therefore, the ultimate goal of our monetary policy should be to achieve the internationalization of the RMB because the RMB becoming a world currency can enhance our international influence and monetary discourse; can avoid the risk of currency mismatch and maturity mismatch; can increase our The above-mentioned is the necessity of RMB internationalization. The continuous development of Chinas economy has laid a solid material foundation for RMB internationalization; in addition, the gradual maturity of Chinas financial market and the increasing improvement of its financial system have provided reliable regulatory protection for RMB internationalization.
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