Empirical Study on Factors Influencing RMB Exchange Rate Based on Multiple Linear Regression Model

With the substantial progress on globalization, recently the rate of RMB has drawn an ever-growing attention of the public. This paper applies econometrics model to explore the possible leading factors of affecting the rate of RMB, which is also based on relevant theories and the situation of China. The results say that the leading factors are PMI, M2 and FER. Significantly, PMI is the most influential factor among them. Nevertheless, FDI, CPI and FBT reveal a non-significant outcome to affecting the rate of RMB. In terms of the conclusion, some proposals are presented to suggest that the government be concerned about the controlling of the export and import, investment decision, the issuance of money, as well as the regulatory framework of foreign exchange reserve management.