The Way Of PBC Affecting Exchange Rate

< p > China's exchange rate reform began in 1994, the people's Bank of China's announcement on further reforming the foreign exchange management system.

From the founding of new China to 1994, the exchange rate system of our country has gone through the dual floating period (1981 to 1984) and the exchange rate between the official exchange rate and the foreign exchange adjustment price (1985 to 1980), which were the single floating exchange rate system (1949 to 1952) in the early days of new China, the single fixed exchange rate system in the 50s and 60s of last century (1953 1972), the single floating exchange rate system (1973 1980), the official exchange rate and the internal settlement price of foreign exchange in the Breton forest system, and the exchange rate between the official exchange rate and the foreign exchange adjustment price.

< /p >

< p > we can see that since the beginning of reform and opening up to 1994, our country has foreign exchange pactions, but there is no unified market, but a dual track system: the first track is the planned track, that is, according to the official exchange price of the government, the other is the market orbit, which began to take shape in the 80s of last century. The system of "foreign exchange retention" was introduced in the country, that is, allowing foreign exchange earning enterprises to leave a certain proportion of foreign exchange for personal use, and allowed to get the "foreign exchange adjustment center" for trading.

< /p >

< p > < < a href= > http:// > www.91se91.com/news/index_c.asp > the announcement of the people's Bank of China < < /a > > on the further reform of the foreign exchange management system > has opened the first exchange reform in China. Through this system, the dual track system since the reform and opening up has been merged and the mandatory foreign exchange settlement system has been established.

This system originates from the strong tendency of the monetary authorities to accumulate foreign exchange reserves, and there is little room for other subjects to choose currencies.

Since 2001, China has gradually relaxed the current system of foreign exchange settlement and sale, and ended the mandatory foreign exchange settlement system in 2007. In 2002, the quota of foreign exchange retained in foreign exchange accounts for 20% of the foreign exchange receipts of the enterprises' regular items in the previous year, increased to 30% or 50% in 2004, and increased to 50% or 80% in 2005; in 2007, the account quota management was abolished, allowing enterprises to independently retain the < a href= "http:// www.91se91.com/news/index_c.asp" > foreign exchange < /a > according to their business needs.

< /p >

In the process, the reform of the exchange rate formation mechanism of < p a > http:// > www.91se91.com/news/index_c.asp > RMB > /a > also began to start: in July 21, 2005, the RMB exchange rate no longer focused on the single dollar, but chose a number of major currencies to form a basket of currencies. At the same time, it used a basket of currencies to calculate the change of the RMB's multilateral exchange rate index, and implemented a regulated and managed floating exchange rate system based on market supply and demand with reference to a basket of currencies. At the same time, the floating rate of RMB exchange rate gradually expanded. In 1994, the floating rate of the RMB exchange rate was 0.3%, expanded to 0.5% in May 21, 2007, expanded to 1% in April 16, 2012, expanded to 1% in April 16, 2012, and increased to 2% in March 17, 2014.

< /p >

< p > the US monetary authorities began to buy foreign currencies in the foreign exchange market in 1962 to implement intervention so as to reduce the fluctuation of exchange rate and prevent the sudden change of exchange rate.

In the US foreign exchange intervention operation, the Federal Reserve Bank of New York has an important position. It has two special functions that other local federal banks do not undertake, namely open market operations and foreign exchange trading operations. It is a common foreign exchange agency between the US Treasury and the Federal Reserve.

< /p >

After P > 1994, China's interbank foreign exchange market was established, forming two levels of the foreign exchange market: the first level is the foreign exchange retail market between banks and customers; the second level is the interbank foreign exchange market, which is also called the foreign exchange wholesale market. In this market, qualified banks and other financial institutions, as well as these banks and financial institutions and the people's Bank of China conduct foreign exchange pactions, and the people's Bank of China can achieve the impact on the exchange rate in this market.

Beginning in July 21, 2005, the people's Bank of China closed the market on every working day to announce the closing price of the exchange rate of the US dollar and other trading currencies in the inter-bank foreign exchange market on that day.

Since January 4, 2006, the people's Bank of China has authorized the China foreign exchange trading center to announce the central parity of RMB against the US dollar at 9:15 a.m. on each working day, as the intermediate price of the inter-bank spot foreign exchange market and the bank's OTC trading rate. The formation of the intermediate price has been used so far.

< /p >

< p > China's exchange rate system is a regulated and managed floating exchange rate system based on market supply and demand and reference to a basket of currencies. The intermediate price and the permitted floating range form the real exchange rate in the course of RMB trading.

That is to say, under the regulation of a certain floating range, the PBC can guide the exchange rate by influencing the exchange rate: as an influential trading entity in the interbank market, the size and price of the foreign exchange bought and sold by the PBC can have a direct and significant impact on the middle price.

< /p >