The political pressure from the US upon RMB exchange rate

In this study, we investigate the motives and results of US political pressure on the RMB exchange rate. "Classified event-abnormal return rate method" is applied to determine whether political pressures from the US caused abnormal return rate of the RMB exchange rate from July 22, 2005, to December 31, 2018. After examining the combined effect of various types of pressure events, we found that in general, the US political pressure events did not cause the abnormal return rate of the RMB exchange rate. During the state of appreciation (2005.7.22-2014.1.31), the RMB exchange rate was influenced significantly by the political pressures from the US, whereas the influence became insignificant since February 2014 when RMB started to depreciate. In comparison to the pressure events initiated by the US Congress, the pressure events of administrative departments had more significant impacts on the abnormal return rate of the RMB exchange rate . (c) 2021 Elsevier B.V. All rights reserved.