The paper gives the guideline, background and concrete path for comprehensive reform of RMB exchange rate regime, a systemic project that centers around the reform of RMB exchange rate formation mechanism under an improved foreign exchange market and foreign exchange administration system.

This paper explores the issue of RMB exchange rate formation mechanism.

Based on a review of the background of the establishment of China s interbank FX market,this paper introduces the development process of China s interbank FX market from the perspectives of reforming and improving the exchange rate forming mechanism,innovating products in the FX market and enhancing the level of service offered by CFETS.

The paper aims to understand the extent of RMB real exchange rate misadjustment through an empirical analysis of the influencing factors and at the same time points out the important impacts of exchange rate elasticity in the reform of RMB exchange rate policy and accordingly gives advice on the perfection of exchange rate forming mechanism.

This article sets out from the the RMB exchange rate system s historical evolution,it has indicated some characteristics of present RMB exchange rate system,then it draws the conclusion that present RMB exchange rate system exists some question--the compulsive exchange surrender system exists flaws,the RMB lacks the elasticity,the foreign exchange market is imperfect.

The Stage and Rationality of the Current RMB s Exchange Rate Mechanism;

According to the practice of emerging market countries, the choice of exchange rate regime should take into consideration not only the economic principles such as the independence of monetary policy, trade and investment promotion and monetary replacement, but also non-economic principles such as political system, party system and general election.