Dirty Whatisforexrebateteractive What is forex rebate forexrebatenetwork system (Dirtyfloat)Dirty floating exchange rate system Overview Dirty interactive exchange rate system (or managed floating exchange rate system<managedfloat>) refers to a kind of exchange rate system in which the official exchange rate target is not disclosed The central bank or monetary authority intervenes in the cashback forex exchange market to maintain the exchange rate at its undisclosed target level, bestforexrebate the target level may change with the environment The managed floating exchange rate system is an inherent requirement of Chinas economic development. Before the RMB becomes a freely convertible currency, China should adhere to a market-based supply-and-demand managed exchange rate system that is mainly "managed" and supplemented by "floating". Therefore, it is necessary to choose the right time to improve the current exchange rate management mechanism and operation method. In the long run, when the RMB becomes a freely convertible currency, China should adopt an independent floating exchange rate system.　　Since 2002, the pressure from the U.S., Japan and other Western countries to appreciate the RMB has become stronger and stronger. Since 1994, Chinas economy has entered a period of rapid growth, with GDP increasing from RMB 3,463.44 billion in 1993 to RMB 10,239.8 billion in 2002, an increase of 2.96 times in nine years. In addition to the rapid economic growth in 2003, Chinas GDP reached 13,651.5 billion yuan in 2004, an increase of 9.5% over the previous year, and the GDP per capita reached US$1,270, which provided the preconditions for the enhancement of Chinas comprehensive national power. Second, the rapid increase in dependence on the world economy is a direct and long-term cause of external pressure. Since the goal of establishing a socialist market economy was set in the fall of 1992, China has increased the pace of opening up its economy to the outside world, the economic structure has improved significantly, and the marketization of social resource allocation has increased significantly. The changes in the economic system have greatly increased social productivity and thus enhanced the international competitiveness of Chinas economy. The implementation of the open-door policy and the improvement of the investment environment have enhanced the attractiveness of China to foreign investors, especially the institutional changes made around Chinas accession to the World Trade Organization and the further opening to the outside world, and the increasing internationalization and marketization of Chinas economic operation, thus attracting world-renowned multinational companies to enter China, which has not only caused the annual surplus of Chinas capital and financial accounts but also promoted From 1994 to 2002, except for 1998 when a large scale capital flight occurred due to the Asian financial crisis, which led to a deficit of $6.321 billion in the capital and financial accounts, the rest of the years saw a large scale surplus, and in 2002, China attracted $52.7 billion in foreign direct investment, surpassing the United States for the first time and becoming the worlds The actual use of foreign direct investment in 2004 was 60.6 billion U.S. dollars, an increase of 13.3% over 2003, and Chinas foreign trade has grown at a high rate since 1994, with total foreign trade of 195.7 billion U.S. dollars in 1993, after nine years of development; by 2002 it had reached 820.8 billion U.S. dollars; total imports and exports in 2004 were 1, In 2004, the total import and export amounted to US$1,154.7 billion, an increase of 35.7% compared with 2003, of which, the export amounted to US$593.4 billion, an increase of 35.4%, and the import amounted to US$561.4 billion, an increase of 36.0%. Of particular importance is that since 1994, the foreign trade account and the current account have been in surplus. In 2001, the current account deficit was $17.405 billion and the capital and financial account surplus was $34.775 billion; in 2002, the current account surplus was $35.422 billion and the capital and financial account deficit was $32.291 billion; in 2004, the trade surplus was The rapid development of foreign trade has led to a year-on-year increase in Chinas trade dependence, which reached 46% in 2002 and 69.95% in 2004, indicating that Chinas economy has become more dependent on the external economy, and changes in the external economy are prone to Although Chinas total foreign trade surplus has remained stable, the regional structural imbalance has become increasingly prominent, mainly in the trade relations between China and the U.S. In recent years, the trade imbalance between China and the U.S. has tended to widen, and the trade surplus has been increasing at a rate of more than 30% per year In the first 11 months of 2004, China earned $71.49 billion from its trade with the U.S. In the first 11 months of 2004, China earned a surplus of $71.49 billion from trade with the United States, an increase of 34.5 percent over the same period of the previous year. When the U.S. economy is in recession, the U.S. is prone to blame its trading partners, thus generating trade friction. The massive foreign investment in China, including multinational companies, is also an important cause of economic friction between China and foreign countries. For example, the first country to take issue with the RMB exchange rate is Japan, but in the Sino-Japanese trade relations, Japan is often in a surplus position, so why does Japan still demand RMB appreciation? This can only be explained by Japanese companies direct investment in China.　　Although the exchange rate issue belongs to the monetary sovereignty of the country and foreign countries have no right to request a country to change the exchange rate level, exchange rate system and its policies, the externality of the exchange rate will become an excuse for Western countries to Therefore, in order to resolve trade friction and ease economic conflicts, it is necessary to reform the RMB exchange rate system from a long-term perspective. The central bank has always insisted that China is practicing a "managed floating exchange rate system", but in fact it is a pegged exchange rate system, so it is important to abandon the current "pegged single dollar exchange rate system" and return to a real "single managed floating exchange rate system based on market supply and demand". The pegged exchange rate system is prone to unilateral exchange rate expectations, and it is difficult to change the exchange rate expectations in the short term, thus bringing great difficulties to the foreign exchange management exchange rate management and the implementation of monetary policy. For example, in recent years, with the rapid development of Chinas foreign trade, Japan, the United States and South Korea and other countries to put forward the RMB appreciation requirements in addition to the gradual formation of the RMB exchange rate appreciation expectations, the 1990s from Chinas domestic flight of capital began to return to the domestic, some speculative funds in the RMB exchange rate appreciation expectations, but also managed to enter the territory of China through various means, thus intensifying the domestic For example, in recent years, although the management authorities have allowed foreign trade enterprises to open foreign exchange accounts and retain some foreign exchange, and the portion of foreign exchange that enterprises can retain has reached about 30%, the actual share of foreign exchange held by enterprises is far below the allowed retention limit, and the main reasons for this are First, under the governments promise that the RMB will not depreciate, enterprises do not have to worry about the risk of RMB depreciation when they need foreign exchange, thus enhancing their willingness to hold RMB; second, under the conditions of current account liberalization, enterprises do not have to worry about not being able to buy foreign exchange when they need to use it for imports. For foreign trade enterprises, foreign exchange is no longer a scarce resource, so it is not important for them to hold foreign exchange or not; third, after enterprises hold foreign currency, the outflow of funds is subject to greater institutional restrictions and the lack of foreign currency-denominated financial instruments available in the domestic financial market, so the return from holding foreign currency is likely to be lower than that of RMB, which makes enterprises reluctant to hold foreign exchange; fourth, the expectation of RMB exchange rate appreciation makes enterprises reluctant to hold RMB. The benefits of a managed and flexible exchange rate system are obvious: (1) Enriching the means of regulation of the open economy Experience shows that the rigidity of the exchange rate will make the central banks monetary control passive, in terms of macro management, but also the lack of effective monetary control means, which does not meet the requirements of the open economy. With the further opening of Chinas economy to the outside world and its gradual integration into the global economic integration system, the market-oriented exchange rate policy will become an important means of regulating foreign-related economic activities. Therefore, the significance and role of marketization of RMB exchange rate is: firstly, it adds macro-control tools for the government; secondly, it can win an independent monetary policy under the semi-fluidity of international capital, instead of passively following the trend of a certain currency (2) improve the efficiency of resource allocation. Price is a signal to reflect the scarcity and surplus, the market mechanism is an effective way to allocate resources, price control will inhibit the role and efficiency of the market price mechanism. Foreign exchange represents the right to demand and dominate foreign resources, the market has a certain efficiency in the allocation of foreign exchange resources. Therefore, under the managed floating exchange rate system, the RMB exchange rate should be determined by supply and demand through the market as much as possible, allowing the exchange rate to float within a certain range and allowing the market to discover the equilibrium exchange rate level to meet the requirements of efficiency, in order to better promote the effective exchange of foreign economic trade and investment in China and improve economic welfare. However, the central bank must intervene in the market when the RMB exchange rate deviates from its target rate more significantly, so that the RMB exchange rate can have a certain degree of flexibility and maintain the basic stability of the exchange rate (3) Cultivate awareness of exchange rate risks and promote the development of financial commodities Allowing the RMB exchange rate to fluctuate moderately is conducive to cultivating awareness of exchange rate risks among Chinas foreign-related enterprises (4) Expanding the scope of exchange rate floating will promote (5) Increase the flexibility of the RMB exchange rate and change the exchange rate risk from being borne mainly by the state to being borne mainly by market participants. From the perspective of "management", changing the current practice of pegging the RMB to the nominal exchange rate target of a single currency and managing the RMB exchange rate according to the effective exchange rate level will not only give better play to the resource allocation efficiency of the exchange rate, but also avoid, to a certain extent, the accusations of Western countries on Chinas exchange rate system and exchange rate level.　　Now a popular view is that China is recommended to use a pegged basket of currencies exchange rate system its rationale is that: because the exchange rate fluctuations between major international currencies more frequent and volatile, the nominal pegging of a single currency will be on the local currency against other currencies in the midst of large fluctuations in the cross-exchange rate, while the reference currency basket exchange rate can somewhat avoid this defect the key issue of the program is to choose the appropriate basket of currencies, both Convenient operation, but also to make the basket exchange rate better approximation of the effective exchange rate although the pegged basket currency to a certain extent to mitigate the volatility of the cross-exchange rate against other currencies in the case of pegging a single currency, but still belongs to the fixed exchange rate arrangement, with a lack of exchange rate flexibility, the central bank is forced to intervene frequently and other fixed exchange rate some of the defects.　　Therefore, exchange rate targeting is a better option for the RMB than pegging to a basket of currencies. By implementing exchange rate targeting, the disadvantages of pegging to a basket of currencies can be avoided to a certain extent, and the advantages of both fixed and floating exchange rate systems can be achieved.　　The exchange rate target zone is the target range of future exchange rate movements established by the monetary authority, once established, the central bank has to intervene in the foreign exchange market to make the exchange rate move within the target zone The exchange rate target zone involves: the choice of the equilibrium exchange rate of the target zone, the choice of the upper and lower boundaries of the target zone, i.e. the width of the target zone, the degree of openness and transparency of the target zone, the degree of commitment to intervene in the exchange rate within the target zone. There are two types of exchange rate target zones: hard target zone refers to a narrower, infrequently revised, fully transparent and open exchange rate target zone maintained by the central bank through intervention; on the contrary, soft target zone is wider, subject to frequent revisions, and determined by official secrecy China should adopt a "soft and hard" RMB exchange rate target zone that is. If it is not transparent and open, it is difficult to achieve the effect of establishing the target zone, stabilizing the exchange rate and influencing the market; it has a certain width in order to give greater exchange rate flexibility, play the market mechanism of price discovery and guide the effective allocation of resources; it can be amended in order to avoid the exchange rate arrangement when the economic fundamentals change significantly. The central bank should intervene when the market exchange rate reaches the upper and lower boundaries of the target area, which is the main work of the exchange rate target area management. foreign exchange of the corresponding currency to influence the ratio of that currency to the RMB, which will affect the money supply; second, through a combination of foreign exchange open market and bond open market operations, that is, offsetting intervention measures to the trend of exchange rate movements, but does not change the money supply; third, through the control of short-term capital flows to control the impact of large-scale] on the exchange rate target zone; fourth, verbal intervention, as Chinas marketization process With the deepening of Chinas marketization process, the cultivation of an authoritative spokesperson on the RMB exchange rate, through which the spokesperson, verbal intervention in the foreign exchange market International experience shows that the top officials of the central bank or the Ministry of Finance are the best candidates for authoritative spokespersons on the exchange rate of the national currency.　　Another element of target zone management by the central bank is to ensure the credibility of the target zone and to prevent devastating shocks. This requires the central bank to (1) honor its commitment to intervene in the upper and lower limits of the target zone, which is relatively easy to do in China, where capital and financial items are controlled; (2) eliminate arbitrariness in changes in the central equilibrium exchange rate to ensure the degree of market trust in the target zone of the exchange rate; and (3) adjust the central equilibrium exchange rate of the target zone in a timely manner in the event of major changes in domestic and foreign economic fundamentals, and should not stick to the Under the current conditions of capital and financial project control in China, the management system of RMB exchange rate target zone can not only guard the exchange rate target at a lower cost, but also effectively play the exchange rate mechanism while gaining the benefits of basic stability of RMB exchange rate, and at the same time, it can also produce less friction with external The managed floating exchange rate system will not only guard the exchange rate target at a lower cost, but will also allow the exchange rate mechanism to function effectively while gaining the benefits of basic stability of the RMB exchange rate, and at the same time, generate less friction with the external economy.　　One of the key issues in achieving a managed floating exchange rate system depends on the reform of the foreign exchange management system. (1) further relaxing the limit of foreign exchange held by enterprises until the abolition of the compulsory settlement and sale of foreign exchange; (2) further relaxing the quota of foreign exchange banks until the abolition of foreign exchange position management for foreign exchange banks; (3) further relaxing the restrictions on foreign exchange purchases by legal and natural persons under the current account, and fully fulfilling the obligations of IMF Article 8 countries; (4) gradually relaxing the restrictions on capital outflow (4) gradually relax the restrictions on capital outflow and encourage private enterprises to make direct investments overseas; (5) gradually implement investments by domestic legal persons and natural persons in overseas financial markets.