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Research on the Linkage between RMB Interest Rate and Exchange Rate

Tianqi Huang
Vol.3, No.1, pp.371-375, 2024 DOI: 10.62051/IJGEM.v3n1.44 May 9, 2024
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Abstract: This study uses a vector autoregressive (VAR) model to investigate the relationship between the exchange rate (EX) and RMB interest rate (I). The research starts with a review of pertinent theoretical frameworks and then conducts an empirical analysis with historical data to determine the long-term interactions between these two macroeconomic factors in the Chinese market. The empirical findings demonstrate the extent to which the I affects EX as well as the reciprocal relationship between EX and I The stability of the linkage is further explored using variance decomposition and impulse response analysis. In addition to offering policymakers a foundation for regulating monetary policy, this study offers a fresh viewpoint on the macroeconomic dynamics of China.
Keywords: RMB, Interest rate, Exchange rate, Interactivity, VAR model
APA Citation: Tianqi Huang (2024). Research on the Linkage between RMB Interest Rate and Exchange Rate. International Journal of Global Economics and Management, 3(1), 371-375. https://doi.org/10.62051/IJGEM.v3n1.44

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