Managed float rebateforexg Forex Rapid Rebate rebateforexfee system (ManagedFloatingRateSystem) Managed cashback forex exchange rate system Overview A managed floating exchange rate system ForexRapidRebate an exchange rate system in which a countrys monetary authority intervenes in the foreign exchange market from time to time in accordance with the needs of the countrys economic interests, so that the exchange rate of its currency rises rebateforexbroker falls in a direction favorable to the country in a managed In a managed floating exchange rate system, the exchange rate fluctuates within a range determined by the monetary authority The floating range helps to eliminate the influence of short-term factors When the fluctuation of the exchange rate within the range still cannot eliminate the influence of short-term factors on the exchange rate, the central bank then intervenes in the foreign exchange market to eliminate the influence of short-term factors The difference between a free floating exchange rate system and a managed floating exchange rate system A floating exchange rate system can be divided into a free floating exchange rate system and a The disadvantage of this system is that large fluctuations in the nominal (and real) exchange rate may distort the allocation of resources, and the randomness and inflation bias of the exchange rate is greater. The exchange rate changes in the direction favorable to the countrys economic development Although the monetary authority intervenes in the foreign exchange market, it does not defend any defined parity, and the frequency of intervention depends on the exchange rate target The advantage of a managed floating exchange rate system is that it avoids excessive fluctuations in the exchange rate, and the main disadvantage is that the behavior of the central bank sometimes lacks transparency and may cause a certain degree of uncertainty Under the current international monetary system, most countries implement The managed floating exchange rate system is based on supply and demand in the foreign exchange market, and is floating, not fixed; the difference between it and the free floating exchange rate is that it is subject to macro-control management, that is, the monetary authorities according to the price formed in the foreign exchange market to announce the exchange rate, allowing it to float up and down in the specified floating range Once the exchange rate floats beyond the specified range, the monetary authorities will enter the Under the floating exchange rate system, countries no longer specify the range of exchange rate fluctuations, and the central bank no longer assumes the obligation to maintain the upper and lower limits of fluctuations, the exchange rate of each country is based on the supply and demand of foreign currency in the foreign exchange market Chinas exchange rate system does not yet have the conditions for free floating. Chinas choice of a managed floating exchange rate system is a scientific and correct choice in line with Chinas national conditions. On July 21, 2005, the Peoples Bank of China announced that China would begin to implement a managed floating exchange rate system based on market supply and demand, adjusted by reference to a basket of currencies, and that the RMB would appreciate by 2% against the US dollar. 2% This decision of the Peoples Bank of China marks a new stage in the reform of Chinas exchange rate system and the adjustment of its economic growth strategy A floating exchange rate system means that a countrys monetary authority no longer sets the ratio of its currency to foreign currencies and the extent of exchange rate fluctuations, nor does the monetary authority assume the obligation to maintain the limits of exchange rate fluctuations, but allows the exchange rate to fluctuate freely with the changes in supply and demand in the foreign exchange market　　Global financial system since March 1973, the dollar-centered fixed exchange rate system no longer exists, and was replaced by a floating exchange rate system to implement the floating exchange rate system is mostly the worlds major industrial countries, such as the United States, the United Kingdom, Germany, Japan, etc., most other countries and regions are still pegged exchange rate system, its currency is mostly pegged to the dollar, the yen, the French franc, etc. in the implementation of the floating exchange rate system After the implementation of the floating exchange rate system, the original legal gold content of the currency of each country or with other countries to conclude the gold parity of paper currency, it does not play any role, therefore, the national exchange rate system tends to be complex, market-oriented In the floating exchange rate system, countries no longer specify the exchange rate fluctuations up and down, the central bank also no longer undertake to maintain the fluctuations of the upper and lower limit of the obligation, the exchange rate of each country is based on the foreign exchange market in the foreign exchange supply and demand situation, their own floating and adjustment At the same time, a countrys balance of payments caused by changes in the supply and demand for foreign currency is the main factor affecting the exchange rate changes - countries with a surplus balance of payments, the supply of foreign currency increases, the price of foreign currency falls and the exchange rate floats down; countries with a deficit balance of payments, the demand for foreign currency increases, the price of foreign currency rises and the exchange rate fluctuates up and down It is a normal phenomenon in the foreign exchange market, a countrys currency exchange rate up, is the currency appreciation, down is depreciation should be said that the floating exchange rate system is the progress of the fixed exchange rate system with the continuous reform of the global international monetary system, the International Monetary Fund in April 1, 1978 to amend the "International Monetary Fund" provisions and officially came into effect. As the new exchange rate agreement gives countries a strong degree of freedom in choosing the exchange rate system, countries now implement a variety of exchange rate systems, including separate floating, pegged floating, flexible floating, joint floating, etc. Here, separate floating means that a countrys currency is not fixed with any other currency. At present, more than 30 countries, including the United States, the United Kingdom, Germany, France, Japan and so on, implement separate floating pegged floating means that a countrys currency maintains a fixed exchange rate with another currency, and then floats with the latters floating generally, countries with unstable inflation can restrain their inflation by pegging a stable currency to improve the credibility of the currency Of course, the use of the pegged floating method, but also the countrys economic development will be subject to the pegged countrys economic situation, and thus suffer losses currently about 100 countries or regions around the world using the pegged floating method flexible floating refers to a country according to their own development needs, the pegged exchange rate in a certain range of flexibility can be free to float, or according to a set of economic indicators to adjust the exchange rate, so as to avoid the pegged floating exchange rate Deficiencies, access to foreign exchange management, monetary policy more autonomy at present, Brazil, Chile, Argentina, Afghanistan, Bahrain and more than a dozen countries using flexible floating way joint floating refers to the group of countries to the internal currency of member countries to implement a fixed exchange rate, to the group of currencies outside the joint floating exchange rate EU (European Community) 11 countries in 1979 established the European Monetary System, the establishment of the European Currency Unit (ECU), with which national currencies are pegged to establish exchange parity, and constitute a parity network, the fluctuations of national currencies must be kept within the prescribed range, once the exchange rate fluctuations exceed the early warning line, the countries concerned should jointly intervene in the foreign exchange market In 1991, the EU signed the Treaty of Maastricht, the development of the European monetary integration process table, January 1, 1999, the euro was officially launched, the European monetary Integration was realized, and a regional monetary bloc such as the EU has emerged Under the floating exchange rate system, the magnitude of exchange rate fluctuations greatly exceeds that of the fixed exchange rate system Under the floating exchange rate system, the magnitude of exchange rate fluctuations greatly exceeds that of changes in the basic economic factors that determine the exchange rate (such as the price level, income level, and money supply) Under the floating exchange rate system, the exchange rate fluctuates not only in the short term The traditional theories of exchange rate determination (such as purchasing power parity theory and interest rate parity theory) are no longer able to explain the real exchange rate movements. thus deepening peoples understanding of exchange rate movements In the process of global economic integration, the past monopoly of the US dollar in international finance is developing towards multipolarity, and the international monetary system will develop towards the trend of free floating exchange rates of countries, diversification of international reserves, financial liberalization and internationalization Since the 1970s, various explanations of exchange rate fickleness under floating exchange rate regimes have viewed exchange rates as a These theories have been collectively referred to as the asset market analysis of exchange rate determination. The starting point of the asset market analysis of exchange rate determination is a very simple idea, since the exchange rate is the relative price of two currencies and is therefore by definition an asset price, and the exchange rate behaves in the same way as other asset prices (stock and bond prices). One of them is the "expansion effect theory", which considers the exchange rate volatility under a floating exchange rate regime as an expansion effect, an elastic price of exchange rate determination. is a function of the real income, price level and nominal interest rate level, therefore, the exchange rate is determined by the income, price and interest rate levels at the equilibrium of the money market In the conditions of rational expectations, the present exchange rate is the sum of the "discounted values" of all future expected money supply, income level, interest rate level, price level and other basic economic factors If the economic party expects the basic economic factors such as money supply and income level to change in the future, the present exchange rate will change even if the basic economic factors such as money supply and income level remain unchanged. The second is the "overshooting effect theory". The mechanism of overshooting is the oscillatory effect due to the change in monotonicity, and the basic reason for this phenomenon is that the continuous change in the stock requires a temporary change in the flow overshooting is a general characteristic of asset prices, but it draws attention to overshooting in the foreign exchange market Cassel noticed the phenomenon of overshooting in the foreign exchange market in the 1920s, but he did not Systematic analysis of this phenomenon the first system of exchange rate overshooting model by Dornbusch in 1976, the proof of the phenomenon of exchange rate overshooting is basically borrowed from chemistry in the La Charriere theorem exchange rate overshooting theory borrowed from the theorem that exchange rate overshooting is actually a compensatory behavior, overshooting models are assumed that some nominal variables are fixed (or sticky) in the short run, for example, McKinnon assumed foreign exchange markets lack sufficient speculative capital, Frank argues that new information has different effects on commodity and asset markets, and Bronson argues that asset owners cannot quickly recover their asset portfolio balances in the face of external disturbances In Dornbuschs overshooting model, it is assumed that prices are sticky in the short run and purchasing power parity does not hold in the short run, so that asset markets can adjust quickly while commodity markets adjust relatively Slowly, the adjustment process of the economic system is carried out in the short run through asset prices, i.e., interest rates and exchange rates Assuming that an increase in the money supply, under sticky price conditions, causes an immediate rise in real balances and a fall in domestic interest rates, while a fall in domestic interest rates leads to capital outflows and currency depreciation Since the condition of interest rate parity without throwbacks always holds, a fall in domestic interest rates thus generates expectations of future currency appreciation For a given In the short run, the exchange rate exceeds its long-run equilibrium value as determined by purchasing power parity. However, as the interest rate falls and the currency depreciates, there is excess demand in the commodity market, which drives up the price level, thus reducing the domestic money balance, causing domestic interest rates to rise, capital inflows, currency appreciation, and the economic system gradually reaches its long-run Therefore, in a general sense, exchange rate overshooting means that for a given external disturbance, the exchange rate reacts in the short run beyond its long-term equilibrium value, and then the opposite adjustment process occurs, and the exchange rate eventually returns to its long-term equilibrium value. Theory" according to the asset market analysis of exchange rate determination, even if there is no change in the basic economic factors such as money supply and income level, as long as the change in expectations, the exchange rate will also change once the exchange rate changes from the basic factors, expectations can be self-reinforcing, the formation of speculative bubbles speculative bubbles in the foreign exchange market is not explained by the basic factors of the exchange rate rise, speculative bubbles Speculative bubble depends mainly on some market psychological factors speculative bubble is a rational bubble, if the speculator is fully aware of the market equilibrium exchange rate determined by the basic economic factors, even if the current exchange rate is higher than the equilibrium rate, as long as the future exchange rate rise can compensate the speculator to bear the risk speculator to buy is also rational, because he knows that the price will return to the equilibrium level at a certain date if all speculators are so expected that Then, in each period, there is a probability that a bubble will exist. Once a bubble is formed, the exchange rate will rise faster and faster because the exchange rate must rise faster to compensate for the risk taken by the speculator. The existence of a speculative bubble indicates that it is possible for the exchange rate to move in a self-reinforcing manner, completely independent of the underlying economic factors. The currency substitution theory argues that under a floating exchange rate regime, economic parties hold foreign currencies for transactional, speculative, and precautionary motives The reason for currency substitution is mainly due to the fact that multinational companies produce and operate in different countries and have a strong incentive to diversify the composition of their cash balances to facilitate their operations in different countries and reduce transaction costs At the same time, speculators gain profits by In addition, central banks also hold international reserves denominated in foreign currencies, which are used to intervene in foreign exchange markets and stabilize exchange rates and the macroeconomy. The share in the portfolio of monetary assets varies with the risk and return of each currency, and with the relaxation of foreign exchange controls in various countries, currency substitution has become a common phenomenon in floating exchange rate regimes substitution between existent and foreign currencies, which adds to the pressure of currency depreciation and appreciation The higher the elasticity of currency substitution, the more unstable the exchange rate is, because with a high elasticity of currency substitution, a smaller The higher the elasticity of currency substitution, the more unstable the exchange rate is, because in the case of high elasticity of currency substitution, the smaller the growth rate of money supply will lead to huge changes in the exchange rate, therefore, currency substitution will increase the magnitude of exchange rate fluctuations, making the exchange rate more volatile. Expected changes, expected changes can be quickly reflected in the exchange rate, therefore, new information on exchange rate changes have a decisive role, these new information is "news", that is, unpredictable events common impact on the exchange rate changes "news" including economic The publication of statistics, political events, new international monetary arrangements, rumors, etc. Since "news" is an unpredictable event, therefore, the exchange rate movements associated with "news" is unpredictable, the foreign exchange market reflects the information is not dependent on These information is "good" or "bad", but depends on these information than expected is "better" or "worse "For example, when the government publishes statistics such as the money supply trade balance, the change in the market exchange rate does not depend on the size of these statistics per se, but on the difference between these statistics and peoples prior expectations, which "The "news" theory of exchange rate determination reflects the essential characteristics of the exchange rate, which is an asset price determined in the asset market and is fickle and unpredictable, in which the present asset is In the asset market, the present asset reflects the expectation of future events, it can quickly respond to new information, so the volatility is the inherent characteristics of asset prices Sixth is the "irrational expectations theory" this theory that the expectations in the foreign exchange market is not all rational, from the actual situation of foreign exchange market transactions, there is sufficient evidence to prove that the foreign exchange market in a variety of Different expectations, according to the United States Federal Reserve Bank of New York on the foreign exchange market transactions statistics, the worlds daily foreign exchange transactions up to 430 billion U.S. dollars, the U.S. Federal Reserve Banks report also shows that only 4.9% of transactions are carried out between non-financial institutions, 4.4% of transactions are carried out between non-banks, that is, the proportion of importers and exporters is very low therefore, the foreign exchange market transactions are mainly banks. Transactions in the foreign exchange market are mainly between banks, and the volume of transactions is increasing, which indicates that there are a variety of different expectations in the market, otherwise there would not be such a large volume of transactions, so the expectations in the foreign exchange market is not all rational in the foreign exchange market, different expectations are caused by different forecasting methods in foreign exchange transactions, the commonly used forecasting methods are fundamental analysis and technical analysis so-called fundamental analysis, refers to the analysis of the basic factors of exchange rate movements to speculate on the trend of exchange rate movements, these basic factors include money supply, interest rate levels, price levels and other factors, a variety of exchange rate decisions based on the asset market analysis method of forecasting are basic analysis basic analysis based on a given exchange rate model to calculate the equilibrium value of the exchange rate, when the market exchange rate deviates from the equilibrium rate, the basic analyst expects the exchange rate Technical analysis, also known as chart analysis, refers to the analysis of past exchange rate movements to speculate on future trends in exchange rate movements. When a market indicator rises to a certain percentage, the trader expects the rate to continue to rise, and when a market indicator falls to a certain level from a high, the trader expects the rate to continue to fall. Since the information used in technical analysis is only the past exchange rate movements, and rational expectations require the person to use all relevant information to predict future exchange rate movements, so the technical analysis of all relevant information to predict future exchange rate movements Through the above analysis, we have a better understanding of the volatility of the exchange rate under the floating exchange rate system, we know that the large fluctuations in the exchange rate under the floating exchange rate system will have a very negative impact on the development of our economy, the RMB Large fluctuations in the exchange rate will cause a large impact on our economic and financial stability, which is not in the fundamental interests of China Chinas exchange rate system does not yet have the conditions for free floating The current global economy is not balanced, instability factors still exist, there will be more adjustments in the future, at the same time, the international capital is more liquid, Chinas economic system can not yet withstand the sharp non-orderly adjustment From the conceptual point of view, China Conceptually, Chinas economic reform emphasizes the fundamental role of the market in resource allocation, but also emphasizes the need for management at the macro level; therefore, the exchange rate system should also be a managed floating mechanism Emerging market economies tend to prefer to maintain a more stable exchange rate when choosing their exchange rate policy Academics call this phenomenon "fear of floating" Countries that are afraid of floating exchange rates generally exhibit three characteristics: The reason is that these economies are still very imperfect in terms of market economy institution building, especially the incomplete development of financial markets, and exchange rate fluctuations tend to deviate from the real economic fundamentals to a large extent, bringing serious negative impacts on domestic macroeconomic stability and financial market security China also has the same "fear of floating" characteristics and reasons The characteristics and reasons for floating: as the domestic financial system is still very fragile, domestic financial institutions are still a long way from commercial finance in the true sense of the word, while the regulatory system and related laws and regulations are also very imperfect, and the development of various types of markets is still very shallow, which fundamentally limits the ability of the financial market to set a reasonable price for the exchange rate floating exchange rate will have a negative impact on Domestic financial market security and macroeconomic stability brings huge risks and uncertainties At present, the infrastructure of the domestic foreign exchange market is not enough to support a high-frequency floating exchange rate system Otherwise, the lack of sufficient exchange rate hedging tools will bring huge exchange rate risks to enterprises and residents On the other hand, the private sector does not have the management ability and experience to hedge exchange rate risks RMB towards higher frequency of floating The development and support of various types of forward foreign exchange markets is needed, while the development of foreign exchange markets depends on the promotion of the comprehensive construction of the domestic financial market. It is a more flexible exchange rate mechanism, which is more suitable for Chinas national conditions and the future development of Chinas economy and finance. At the same time, in the process of Chinas further reform and opening up to the outside world, the expectations of macroeconomic fluctuations are highly uncertain, and the actual degree of opening up to the outside world is relatively low, so that we cannot rely too much on the exchange rates role in regulating economic growth. Second, the degree of economic liberalization in China is still relatively low: there are still more controls in the trade and investment fields, and the RMB interest rate is still a non-market interest rate. Again, the RMB is not yet convertible under the capital account, so it is not appropriate to adopt a fully floating exchange rate system. However, in the face of the increasingly frequent international capital flows, especially the deepening integration of China into the world economy, in the long run, the relaxation of capital flows and foreign exchange controls is a necessary process, and most of Chinas major trading partners have adopted a flexible exchange rate system. Therefore, it is scientifically correct for China to adopt a managed floating exchange rate system The management of Chinas managed floating exchange rate system is manifested in the fact that the direction of RMB exchange rate reform is clearly defined as: the implementation of a managed floating exchange rate system based on market supply and demand, adjusted by reference to a basket of currencies. Even if the central bank announces the composition of the currencies, the weights are still confidential. This is why so many economists from foreign banks are keen to calculate what the weight of each currency in the basket is, thinking that they can grasp the fluctuation trend of the RMB exchange rate, not knowing that even if the weight of each currency is calculated, the central bank only adjusts the RMB exchange rate by reference, not by direct pegging, but by reference to the domestic and international economic and financial situation, based on market supply and demand. In other words, the new system leaves a lot of room for the central bank to regulate the exchange rate and because of this, it also increases the influence factors on the formation of the exchange rate and the uncertainty of the exchange rate movement. This also leaves enough room for the central bank to intervene in the foreign exchange market, thus ensuring the basic stability of the RMB exchange rate at a reasonable equilibrium level. The exchange rate reform should fully consider the impact on macroeconomic stability, economic growth and employment. market changes, fully consider the affordability of all parties, and promote the reform in a step-by-step manner More than six months of practice has proved that the exchange rate reform started by Chinas central bank in mid-2005 is very successful, and the facts show that the choice of the central banks managed floating exchange rate system is scientifically correct At the end of that year, Li Deshui, director of the National Bureau of Statistics, pointed out in a reply to a reporters question that "the exchange rate system reform is a major reform, but also full of wisdom of the reform program the introduction of this program only six months, practice has proved to be successful, we can not change overnight, always change, this policy will be maintained for a long time, the exchange rate policy should not often, arbitrary changes, this is a very prudent thing" look forward to 2006, the central banks RMB exchange rate policy reform will be in a managed The floating exchange rate system will continue to deepen