Exchange rate and prices in the economic life of the two economic variables of concern. As China’s economy is increasingly integrated world economy, the exchange rate as a monetary price, and more closely related to our daily lives, while the exchange rate movements on the healthy operation of the economy will have a significant impact, which affects investment decisions of transnational businesses, also affects the business decisions of financial institutions. With the credit economy and symbolic economy continues to develop, as the world economy, financial globalization and China’s socialist market economic system continuously improved and the exchange rate to speed up the process of market reform, the exchange rate impact on the economy growing, has been reflect the macroeconomic situation as an important economic indicator. Macro-control has been frequently around the world leverage the use of the exchange rate, exchange rate policy has become the central banks control the money demand, thereby regulating the operation of the main section of the economy, it is playing an increasingly important role. Therefore, the proper use of the regula more of great theoretical and practical value.
This article first analyzes the status of the RMB exchange rate and RMB exchange rate factors; then give RMB impact on domestic prices change channels, channels from the export trade, consumer prices and foreign debt of the impact on domestic prices; Finally, the governance and policy recommendations to prevent inflation, mainly from the flexible monetary policy to expand domestic demand and control of scarce products, discusses the three aspects.
Key words: factors; domestic price; inflation; exchange rate