Empirical Analysis on the Determinants of the RMB Exchange Market Pressures

Since the establishment of a managed floating exchange rate regime, the fluctuations and the movements of RMB exchange rate are increasingly becoming a major concern of scholars and politicions. In this article, the sources of pressure on the RMB exchange market are quantitatively analyzed based on the Girton-Roper model and its extensions. The results show that the growth rate of domestic credit, GDP growth rates as well as the money multiplier are significant factors impacting the RMB exchange market pressure, RMB exchange market pressure is released mainly by the loss of reserves.