Analysis of the Effectiveness of China's Central Bank Bills Write-off Intervention

Abstract

Since the reform of the exchange rate system in China, in order to stabilize the RMB exchange rate, the people's Bank of China has committed itself to foreign currency markets and adopted various means to intervene actively. In recent years, China's sustained double favourable balance, foreign exchange continued to increase, the people's Bank of Chinese take active sterilization policy to maintain the currency, foreign currency market stability, resist foreign economic impact, in order to guarantee plays a very important role in economic sustainable development. Based on interest rate parity theory to construct mathematical model, makes an empirical test on the effectiveness of the people's Bank of Chinese bill sterilization operation in our country, analysis of relevant data from 2014 to 2016, through the inspection found the time period of the people's Bank of Chinese notes is basically effective sterilization operation.