Analysis of the Current Situation, Problems and Countermeasures of China's Foreign Exchange Market

Abstract

The foreign exchange market is critical to national economies, trade, and financial security. The foreign exchange market provides trade liquidity and means of payment and is an important channel for capital flows and risk management, as well as a risk-transfer channel in the global economic system and has an important impact on central bank monetary policy. As the world's second-largest economy, China has attracted large amounts of overseas investment, bringing new opportunities to the global market. Against the backdrop of the new crown epidemic and geopolitics, China's economy has maintained a good momentum of development, providing impetus for world economic growth and boosting confidence in the global market. Based on the current situation of China's foreign exchange market in recent years, this paper analyses and concludes that there are currently cross-border capital flow restrictions, capital flow pressure, a single trading body, imperfect market supervision and other problems, and finally puts forward a feasible future development path and reform countermeasures for China's foreign exchange market in view of the above problems, which is of great significance for the healthy development of China's foreign exchange market.