The Concrete Investigation Pointing to CNY Exchange Rate from The Perspective of Mundellian Trilemma

DOI

10.2991/978-94-6463-459-4_69How to use a DOI?

Keywords

Mundellian Trilemma (the impossible Trinity); CNY Exchange Rate; Choices; Defects

Abstract

The objective of the study is to analyze the changing trends of the RMB exchange rate policy in recent decades from the perspectives of national policies, the development history, and potential advantages and disadvantages, using the main research method of The Impossible Trinity. This study adopts a desktop research method, focusing on the definition and main content of The Impossible Trinity, the current situation of RMB exchange rate policy, and the possible selection of RMB exchange rate system based on the theory of The Impossible Trinity, to study the reform of RMB exchange rate policy. The results of the study reveal that the main characteristics and reasons for the formation of the RMB exchange rate policy are the diversification of international trade currencies (such as the US. Dollar), the lessons learned from a basket of monetary policies, and the combination of a socialist market economy system. At the same time, it also brings potential shortcomings (the fluctuation of the restricted RMB exchange rate, the affected RMB exchange rate owing to trends of US dollar exchange rate, the contradiction between capital account and exchange rate policy changes, the forced increase in starting-up funds of foreign-funded enterprises, and the need for the further improvement in exchange rate market policies). Therefore, the choice of the RMB exchange rate system should effectively increase the proportion of the RMB in the international market, effectively control the range of RMB fluctuations, and thus achieve a true exchange rate system, which is market-based, single and managed. Ultimately, Chinese monetary system will achieve balance.

Copyright

© 2024 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Ruoxuan Li
AU  - Zimu Wang
PY  - 2024
DA  - 2024/07/23
TI  - The Concrete Investigation Pointing to CNY Exchange Rate from The Perspective of Mundellian Trilemma
BT  - Proceedings of the 2024 9th International Conference on Social Sciences and Economic Development (ICSSED 2024)
PB  - Atlantis Press
SP  - 611
EP  - 622
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-459-4_69
DO  - 10.2991/978-94-6463-459-4_69
ID  - Li2024
ER  -