A Study on the Trend of Equilibrium Exchange Rate of RMB

In order to answer the question that whether the exchange of RMB should be changed or not,we must have a benchmark.Economists often take \!equilibrium rate as a criterion.It is just based on“equilibrium exchange theory”in its discussion as to the burning issue that whether RMB should be revalued upward now or not.At present,the pressures of RMB’s appreciation come from the following three aspects:the first one is the arguments of some developed countries’governments on RMB;the second one is the continuous increasing of China’s balance of payments surplus and foreign exchange reserves;the third one is the shortcoming of present exchange mechanism of RMB.In the discussion on RMB,people focus more attention on China’s achievements of external economic indicators,such as moving trend of foreign trade,foreign investment and foreign exchange reserves and so on.However they generally ignore the development situation of China’s internal economic sector.The macro economic equilibrium exchange theory shows that from the development situation of China’s external economic sector RMB has the pressure of appreciation,and from the development situation of China’s internal economic sector RMB has the pressure of depreciation.This is a paradox.If RMB appreciates,China’s external economic sector will develop rapidly.On the contrary,if RMB depreciates,it will spur the development of China’s internal economic sector.As a result,the conclusion is that on the basis of development situations of both China’s external and internal economic sectors the exchange of RMB should be kept steady now.