Reports Outline Investment Study Findings from Dongbei University of Finance & Economics (Spillover Effects of European Central Bank’s Contractionary Monetary Policy On Rmb Exchange Rate: Evidence From Import-export Trade and Cross-border …): Investment

2026 SEP 09 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Researchers detail new data in Investment. According to news reporting originating in Liaoning, People’s Republic of China, by NewsRx journalists, research stated, “This study employs a time-varying parameter factor-augmented vector autoregression (TVP-SV-FAVAR) model with quarterly data between 2005Q1 and 2023Q1 to investigate the monetary policy spillovers of the European Central Bank (ECB) and their transmission to the RMB exchange rate across three tightening cycles. Key findings include: First, ECB rate hikes generated time-varying negative spillovers, with short-term RMB depreciation (average - 0.265) partly reversed in the next quarter, and the net effect was strong during the 2011 European debt crisis.”

The news reporters obtained a quote from the research from the Dongbei University of Finance & Economics, “Second, the trade channel reflected this expenditure-switching, which was positive before 2021 and negative thereafter, while net-export transmission to the exchange rate varied by regime phase. Third, crossborder capital flows were the dominant channel; under the managed floating regime, net short-term inflows during tightening coexisted with depreciation pressure, yielding net depreciation. Fourth, during the 2022 cycle, despite larger hikes, the RMB depreciated less and recovered faster, indicating greater resilience to external shocks.”

According to the news reporters, the research concluded: “Structural break tests revealed significant breaks in the channel variables but none in the exchange rate, implying that external shocks were absorbed through channel adjustments under China’s managed floating regime.”

This research has been peer-reviewed.

For more information on this research see: Spillover Effects of European Central Bank’s Contractionary Monetary Policy On Rmb Exchange Rate: Evidence From Import-export Trade and Cross-border Capital Flow Mechanisms. International Review of Financial Analysis, 2026;117. International Review of Financial Analysis can be contacted at: Elsevier Science Inc, Ste 800, 230 Park Ave, New York, NY 10169, USA. (Elsevier - www.elsevier.com; International Review of Financial Analysis - http://www.journals.elsevier.com/international-review-of-financial-analysis/)

Our news correspondents report that additional information may be obtained by contacting Shimeng Wang, Dongbei University of Finance & Economics, School of Finance, Dalian 116025, Liaoning, People’s Republic of China.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.irfa.2026.105301. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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