The Influencing Factors of RMB Exchange Rate in the Background of Anti-globalizationAn Empirical Evidence Based on VAR Model

Affected by the epidemic and geopolitics, global economic growth has slowed down, trade protectionism has begun to emerge, and anti-globalization sentiment has begun to sprout. With the pace of the Federal Reserve's interest rate hike, the global exchange rate, especially the RMB exchange rate, is gradually under pressure, which has a great impact on the economy and financial sector of the whole country. The research topic of this paper is the influencing factors of the RMB exchange rate in the background of anti-globalization, and the empirical analysis of the VAR model based on Stata software. The study found that rising domestic interest rates, a rising balance between import and export trade and rising uncertainty about US economic policy will lead to the appreciation of the RMB, while the growth of money supply will lead to the depreciation of RMB. It is worth noting that the RMB exchange rate is less affected by the uncertain economic policy factors in the United States, which shows that under the current anti-globalization and international game background, China still has a relatively independent control of the foreign exchange market.

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Publication Details

Journal
Advances in Economics Management and Political Sciences
Published
2024-09-10
DOI
https://doi.org/10.54254/2754-1169/90/20241966
Primary Topic
Global Financial Crisis and Policies
Type
article
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article

The Influencing Factors of RMB Exchange Rate in the Background of Anti-globalizationAn Empirical Evidence Based on VAR Model

Yuanqi Cheng
Advances in Economics Management and Political Sciences
Global Financial Crisis and Policies
article

The Influencing Factors of RMB Exchange Rate in the Background of Anti-globalizationAn Empirical Evidence Based on VAR Model

Yuanqi Cheng
article en

Abstract

Affected by the epidemic and geopolitics, global economic growth has slowed down, trade protectionism has begun to emerge, and anti-globalization sentiment has begun to sprout. With the pace of the Federal Reserve's interest rate hike, the global exchange rate, especially the RMB exchange rate, is gradually under pressure, which has a great impact on the economy and financial sector of the whole country. The research topic of this paper is the influencing factors of the RMB exchange rate in the background of anti-globalization, and the empirical analysis of the VAR model based on Stata software. The study found that rising domestic interest rates, a rising balance between import and export trade and rising uncertainty about US economic policy will lead to the appreciation of the RMB, while the growth of money supply will lead to the depreciation of RMB. It is worth noting that the RMB exchange rate is less affected by the uncertain economic policy factors in the United States, which shows that under the current anti-globalization and international game background, China still has a relatively independent control of the foreign exchange market.

Advances in Economics Management and Political SciencesVol. 90(1)
Queen's University Belfast (GB), Queens University (BD)
Partnerships for the goals
Openalex Percentile: Top 79%
Global Financial Crisis and Policies
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