Researchers from Zhejiang University of Water Resources and Electric Power Provide Details of New Studies and Findings in the Area of Economics (The Impact of Federal Reserve Monetary Policy Adjustments On Rmb Exchange Rate Fluctuations): Economics

2026 FEB 04 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx Policy and Law Daily -- Data detailed on Economics have been presented. According to news reporting from Hangzhou, People’s Republic of China, by NewsRx journalists, research stated, “This paper examines how U.S. monetary policy is transmitted to the renminbi (RMB) within China’s onshore-offshore exchange-rate structure. Using monthly data from 2012 to 2025 and a time-varying parameter vector autoregression (TVP-VAR) model, we identify how adjustments in three dimensions of U.S. policy-prices, interest rates, and liquidity-affect the onshore (CNY) and offshore (CNH) markets.”

Financial support for this research came from National Social Science Fund of China.

The news correspondents obtained a quote from the research from the Zhejiang University of Water Resources and Electric Power, “The estimates show apparent differences across channels and between the two markets. Movements in the U.S. Dollar Index exert the most persistent influence and become more important when global uncertainty rises. Interest-rate shocks also matter, but their effects depend on the policy environment, whereas liquidity shocks have limited explanatory power. CNH responds more quickly and more strongly than CNY, reflecting the contrast between a globally traded market and one constrained by domestic policy. Institutional changes, including the 2015 exchange-rate reform and the later introduction of the counter-cyclical factor, modify how external shocks influence RMB pricing by altering the interaction between onshore policy tools and offshore market behaviour. Overall, spillovers from U.S. policy to the RMB are neither constant nor uniform; they evolve with shifts in global financial conditions and changes in China’s monetary policy.”

According to the news reporters, the research concluded: “These insights contribute to a deeper understanding of monetary autonomy, exchange-rate formation, and the evolving role of the RMB in global financial markets.”

This research has been peer-reviewed.

For more information on this research see: The Impact of Federal Reserve Monetary Policy Adjustments On Rmb Exchange Rate Fluctuations. International Journal of Finance & Economics, 2026. International Journal of Finance & Economics can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA.

Our news journalists report that additional information may be obtained by contacting Yishi Li, Zhejiang University of Water Resources and Electric Power, School of Economics and Management, Hangzhou, People’s Republic of China. Additional authors for this research include Yu Liu and Jianxun Shi.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1002/ijfe.70135. 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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