Study on the effect of foreign exchange sterilization under the background of expectation of RMB appreciation

摘要

Under the background of China's long-term double surpluses of BOP, RMB has been expected to have the trends of appreciation. To prevent RMB appreciating very quickly, the central bank of China has to intervene the foreign exchange market, and thus has launched more currency into the market. Foreign exchange sterilization is the way that the central has to do. The means of central bank's foreign exchange sterilization includes recycling loan, open market operations, rediscount, issuing central bank bills and raising the deposit reserve ratio act. At the start, the front means works basic basically well, but facing the increasing currency caused by foreign reservation, foreign exchange sterilization cannot solve it effectively. China needs to solve the currency caused by foreign reservation from the source.