Behavioral research on the continuous unilateral appreciation of the RMB: empirical analysis based on the data during 2000–2012

CHEN Langnan1 SU Haifeng2

(1.Lingnan College, Sun Yat-Sen University 510275)
(2.Branch of Guangdong Province, Industrial and Commercial Bank of China)

【Abstract】This paper uses the non-parametric functional coefficient model to investigate the influencing factors of RMB exchange rate appreciation against major currencies for a long time by taking into account the institutional factors. The appreciation of RMB can be explained by the persistent expectation and realization of expectation. The empirical results show that the persistent expectation is the most important determinant of RMB appreciation. However, as the exchange rate is becoming flexible, this factor becomes less important. In contrast, as the capital flow is becoming free, the appreciation expectation is more likely to be realized.

【Keywords】 RMB exchange rate; appreciation; expectation; exchange rate control; capital flow openness;


【Funds】 Planned Foundation Program of Ministry of Education (14YJA7900) Key Project of National Social Sciences Foundation (14ZDA020) Soft Science Project in Guangdong Province (2013B070206025)

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This Article


CN: 11-1692/F

Vol , No. 11, Pages 165-176

November 2015


Article Outline


  • Introduction and literature review
  • 1 Research methods
  • 2 Data and variable
  • 3 Empirical results and analysis
  • 4 Conclusion and inspirations
  • References