Trader Expectation Heterogeneity,Effect of Central Bank Intervention and RMB Exchange Rate Movement:A Study on the Mechanism of RMB Exchange Rate Movement after Reform

This paper studies the influence of traders' heterogeneous expectations and activity on RMB exchange rate movement based on the assumption of trader expectations heterogeneity,as well as the effect of central bank intervention on heterogeneous traders' behavior,to provide further evidence on the mechanism of RMB exchange rate movement after RMB exchange rate system reform in 2005.It's showed that,there's significant expectations heterogeneity for RMB exchange rate,and from July 2006 to Sep.2008 RMB exchange rate volatility increased when the central bank intervention become less intense.Finally,it's concluded that RMB exchange rate's volatility increase after the reform is mainly due to the domination of technology analysts who have strengthened appreciation expectations that is caused by less-intensified intervention of the central bank.