Advances in Economics, Management and Political Sciences
- The Open Access Proceedings Series for Conferences
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
Series Vol. 56 , 01 December 2023
Open
Access | Article
The Impact of the Interest Rates Raised by Federal Reserve System on the Exchange Rate of the US Dollar Against the Chinese Yuan
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Abstract
On March 16, 2022, the U.S. raised interest rates for the first time in response to inflationary pressures, which announced a 25-basis point increase. After the latter four rate hikes happened in May, July, September and November, the cumulative increased total is 425 basis points. This change had a huge impact, especially on the exchange rate between the US dollar and the Chinese currency. This paper uses data on the exchange rate of the US dollar to the Chinese yuan after 2010, and ARIMA model is built to model and analyze the data in order to study the impact of the Federal Reserve’s interest rate hike on the exchange rate of dollar and yuan. Therefore, the analysis discovered that the Fed’s interest rate increase caused the appreciation of the USD and the depreciation of the CNY. Furthermore, the model helps to predict the trend of the future exchange rate, which in turn will provide suggestions for China’s future development.
Keywords
interest rate, exchange rate, US, China, ARIMA model
References
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
- ISBN (Print)
- 978-1-83558-159-9
- ISBN (Online)
- 978-1-83558-160-5
- Published Date
- 01 December 2023
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/56/20231054
- Copyright
- 01 December 2023
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited