On the Reform of RMB Exchange Rate System

The current RMB peg to U.S dollar regime,to a certain degree,boosts the economy in our country,reduces the economic and social costs and exchange rate risk,but it also brings about some problems such aserosionto effects of monetary policy,exposure from internal instability of current regime,likelihood to induce potential financial crisis and being an excuse of international community.Thus, the best solution is returning to the real managed floating regime based on market supply and demand in the middle of 1990s.