The Reasonable Value of Currencies - Take China RMB as Example

• Main Author: 陳春翰
• Other Authors: 李桐豪
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/jvw6q5

碩士 === 國立政治大學 === 金融研究所 === 102 === From the collapse of Bretton Woods Agreements until now, every country changed their currency policy from fix rate to floating rate. From then on, the world began the war of currency. Indeed, when a country’s currency depreciates, it will have some positive effect on export industries and can also improve the long term trade deficit such as US and Japan. But when one currency depreciate, there must be a currency that appreciate. For example, China. Thanks to the quickly growth of economy, China gained a lot of trade surplus and accumulated huge foreign exchange reserve in a short time. And during the financial crisis, China government fixed the exchange rate at 8.28 RMB to 1 US dollar in order to protect their economy. At that time, many country including Europe, USA and Japan, criticized that China government attempt to control the exchange rate and they continually put pressure on China government asking China government to give up the control of exchange rate. As a result, this paper focus on the exchange rate of China RMB in order to find out whether the RMB is really been undervalued and how much the RMB has been undervalued. And we hope that we can look into the future of the China RMB. According to the research, we find out that although RMB had really been overvalued in the past. The situation has improved after the revolution and become more open of China government. Our result shows that recently the China RMB is just been slightly undervalued in accordance with the report published by IMF in 2013/05. Those report shows that there is no reason for the US to make any criticize on the exchange rate of China RMB. We think that what China government should do is to make RMB more internationalized and free of exchange. We believe that RMB may become one of the biggest currencies in the future.