This paper takes the US as an example and uses event study approach to
analyze the political events in which the US pressured RMB exchange rate
between July 22, 2005 and March 31, 2016 as well as the outcomes of such
actions, trying to reveal the influence of such events during the appreciation
and depreciation period of RMB. The conclusions are as follows: 1) The pressure
from the United States did not play a significant role in promoting RMB
appreciation since only 53.4% out of 116 events between July 22, 2005 and March
31, 2016 were successful; 2) In various political events that aim at imposing
pressure between July 22, 2005 and March 31, 2016, the US Congress had more
significant influence on RMB exchange rate than the US administrative sectors;
3) Judging from the number of events, RMB exchange rate hasn’t undergone
obviously increased pressure from the US
since its devaluation in 2014. However, unlike the situation in the
appreciation stage, US administrative sectors were more influential than the
Congress in the devaluation stage.
Liu, L. and Pauwels, L.L. (2012) Do External Political Pressures Affect the Renminbi Exchange Rate? Journal of International Money and Finance, 31, 1800-1818. http://dx.doi.org/10.1016/j.jimonfin.2012.04.001
Liu, T. and Zhou, J.Z. (2011) Do External Pressures Promote the Appreciation of Renminbi? Base on the Assessment of US Impellent Events’ Outcomes between 2005 and 2010. Journal of Financial Research, No. 11, 32-46.
Pierdzioch, C. and Stadtmann, G. (2004) The Effectiveness of the Interventions of the Swiss National Bank—An Event-Study Analysis. Kiel Working Paper No. 1160, Kiel Institute for World Economics, 229-244.