Trade Opening and The Real Effective Exchange Rate of the RMB
DOI:
https://doi.org/10.54097/fbem.v11i2.12163Keywords:
Real effective exchange rate, Trade opening, Industrial structure.Abstract
This paper uses the Redux model and shows that the fluctuation of the RMB under certain fluctuations; then analyzes the effect of the fluctuation of the RMB on the actual effective exchange rate. The study found that trade opening can reduce the fluctuation of the real effective exchange rate of the RMB; the rationalization of industrial structure can also enhance trade opening and restrain the real effective exchange rate fluctuation of the RMB. Meanwhile, the "Belt and Road" initiative intensifies the real effective exchange rate fluctuation of the RMB, possibly due to the change of the "Belt and Road" initiative and implementation in the total industrial structure of import and export. Therefore, all provinces (autonomous regions and municipalities directly under the Central Government) should increase basic research such as science and technology, promote the rationalization of industrial structure, and make the help of the good opportunity of the "Belt and Road" initiative to reduce the real effective exchange rate fluctuations of RMB.
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