Since you study economics, you should analyze it yourself according to the market rules.

Everyone has his own ideas about how to solve it ~ I suggest you sort out your own ideas according to the article.

Since it is a paper, write it according to your own ideas ~ ~ ~

Give you some reference ~ ~

In the past two years, various financial problems caused by the excess liquidity of banks in China have become more and more serious, which has affected the effectiveness of the central bank's monetary policy. This paper starts with the emergence of excess liquidity in commercial banks, analyzes the causes of excess liquidity, and expounds the relationship between excess liquidity and the effectiveness of monetary policy from two aspects: the influence of monetary policy tools on excess liquidity and the influence of bank liquidity on the transmission mechanism of monetary policy. Finally, some suggestions are put forward to alleviate the excess liquidity. Countermeasures to improve the effectiveness of monetary policy.

Keywords: excess liquidity; Monetary policy; efficiency

Before the end of 1990s, the liquidity of China's commercial banks was insufficient for a long time, and the situation of credit expansion was quite obvious. Since the 20th century, liquidity in the banking system has been relatively loose, especially since 2005, the problem of excess liquidity in banks has become increasingly prominent. The "liquidity trap", which is considered by economists to be extremely low probability, has appeared in China's financial operation and has had a noticeable impact on the stable operation of the financial system. [1] In 2006, the huge liquidity of banks led to the rapid expansion of the national credit scale, which indirectly promoted the overall rise of various asset prices and posed a severe challenge to the effectiveness of the central bank's monetary policy. How to effectively solve the problem of excess liquidity in banks, dredge the transmission mechanism of monetary policy, and then improve the effectiveness of monetary policy is a major issue before the central bank.

One? Performance of excess liquidity in banks

The gap continues to widen.

Since the implementation of the latest round of macro-control in 2004, the growth rate of loan balance of financial institutions has been gradually lower than that of deposit balance, and the gap between them has been widening, and loan-to-deposit ratio has fallen sharply. By the end of 2005, the growth rate of deposits was 3. 17 percentage points higher than that of loans, which was 3.8 times that of 2000. The deposit balance of financial institutions reached 9.2 trillion yuan, accounting for 32% of the deposit balance; Loan-to-deposit ratio's stock is 68.0%, and loan-to-deposit ratio's increase is 53.6%. In 2005, for every deposit of 100 yuan absorbed by commercial banks, only 53 yuan turned it into a loan and entered the real economy, while nearly half of the funds remained in the internal circulation of the financial system.

(b) Excess reserves remain high.

The excess reserves of financial institutions in the central bank increased from 400 billion yuan at the end of 2000 to 1.265 trillion yuan at the end of 2004, with an average annual increase of 32.9%. On March 17, 2005, although the central bank lowered the excess reserve ratio by 0.63 percentage points, the excess reserves deposited by financial institutions in the central bank still rose, reaching 1.26 trillion yuan at the end of September. 65438+At the end of February 2005, the excess reserve ratio of all financial institutions reached 4. 17%. Excess reserve not only increases the payment cost of the central bank, but also makes it face the pressure of greatly reducing the transmission effect of monetary policy. By the end of July 2006, the excess deposit reserve ratio of financial institutions reached 2.7%.

(c) The gap between the growth rates of C)M2 and M 1 continues to widen.

In 2005, the growth rate of M2 exceeded the expected growth rate of 15% for several consecutive months, and the growth gap between M2 and m 1 increased from 3.3% at the beginning of the year to 5.8% at the end of the year. By the end of February 2005, the balance of M2 was 29.9 trillion yuan, up by 17.6% year-on-year, and the growth rate was 2.94 percentage points higher than that of the previous year. M 1 balance 10 17 trillion yuan, a year-on-year increase of 1 1.78%, and the growth rate was 1.8 percentage points lower than that of the previous year. After entering 2006, the growth gap between M 1 and M2 is even bigger, and the growth rate of M2 in the first quarter is 8.58 percentage points higher than that of M 1.

(d) Money market interest rates continued to fall.

Since March 2005, the interest rate of the whole money market has been falling continuously. Among them, the interbank market interbank lending rate dropped from the highest 2. 18% to the lowest1.11%; At the end of the year, the 7-day weighted average interest rate of pledged government bonds repurchase was only 1.56%, which was 28 basis points lower than 1.84% at the beginning of the year. As a result, the yield curve of money market shows a downward trend. At present, the yields of 1 year treasury bonds and central bank bills in the inter-bank market are hovering around 1.32% and 1.42%, and the interest rate of two-year financial bonds has also dropped below 2.0%, both lower than the interest rate of 1 year bank deposits, and the money market interest rate and bank deposit interest rate have been upside down. Central bank bill interest rate in the first quarter of 2006? Compared with the end of last year, the inter-bank repo and loan interest rates rose by about 70 basis points. Among them, 1, the spread between central bank bills and deposits narrowed to 38 basis points, and the spread between inter-bank 7-day repo rate and deposits narrowed to 19 basis points, but the phenomenon that money market interest rates and bank deposit interest rates are upside down has not changed.

Two? The main reasons for the excess liquidity of banks in China

(A) imbalance between economic structure and regional development

Economy determines finance. At present, the root of excess liquidity is the imbalance of economic structure and regional development in China. Compared with the rapid growth of investment and exports, the growth rate of consumption has lagged far behind them in recent years. At the end of the 20th century, China began to implement a proactive fiscal policy, and investment growth has always been the main driving force for economic growth. In the rising period of the new economic growth cycle since 2003, the ratio gap between investment and consumption has not narrowed, but has further widened. From 2002 to 2005, the growth rate of China's fixed assets investment was 16.438+0% respectively. 26.2%? 27.6% and 25.7%, while the growth rate of total retail sales of consumer goods in the same period was 8.8% respectively? 9. 1%? 13.3% and12.9%; In the first half of 2006, the former increased by 29.8%, while the latter only increased by 13.3%, which aggravated the imbalance between investment and consumption. Relatively backward consumption makes a large amount of funds precipitate in the internal circulation of the banking system.

At the same time, there is also a structural imbalance in investment. On the one hand, large enterprises have excess funds, on the other hand, the liquidity of small and medium-sized enterprises is extremely tight; On the one hand, repeated investment in some popular industries leads to overcapacity, and on the other hand, medical care? Education and other departments are seriously under-invested. From a regional perspective, to the Yangtze River Delta? The liquidity problem in economically developed areas represented by the Pearl River Delta and Beijing-Tianjin-Tangshan is outstanding, while the vast central and western regions still face the situation of insufficient funds; There is pressure of excess liquidity in cities, but there is still a lack of funds in rural areas. The increasingly active "underground finance" strongly proves that China is not a country with excess liquidity (Ba Shusong, 2006). [2] A few high-profit industries chased by capital "hoarded" a lot of funds, and their asset prices were constantly revalued, which led to the rising prices of related resources, resulting in the illusion of "excess" of bank liquidity.

(B) the rapid growth of foreign exchange reserves

One of the main reasons for the excess liquidity of banks is the increase in foreign exchange holdings driven by the rapid growth of foreign exchange reserves. In 2005, the base currency dominated by foreign exchange accounted for about 90% of the total base currency, and the total amount of bills issued by the central bank for hedging operations reached 2.77 trillion yuan. So, should we "hedge" the pressure of RMB appreciation? The trend of increasing currency liquidity formed by stable exchange rate is still strong. Relevant data show that in the first quarter of 2006, the overall liquidity of money reached 2.0 trillion yuan, a year-on-year increase of 93.4%; Foreign exchange reserves reached 0.88 trillion US dollars, a year-on-year increase of 32.76%; The balance of foreign exchange accounted for 7.7 trillion yuan, a year-on-year increase of 34.96%; In the same period, the balance of bank loans and portfolio investment was 20.6 trillion yuan and 3.6 trillion yuan respectively, increasing by 1 1.29% and 17.23% respectively.

(C) the effective demand for loans is relatively insufficient

In 2005, the loan growth rate of financial institutions in China was 13.53%, which was lower than 14.54% in 2004. The new loans of banking institutions decreased from 3 trillion yuan in 2003 to 2.5 trillion yuan in 2005; The growth rate of medium and long-term loans continued to decline, from 30% in 2003 to 16.2% in 2005. Although the rapid growth of bank loans in the first quarter of 2006 led to the introduction of relevant macro-control measures by the central bank to curb the possible trend of excessive loan delivery, the situation that the effective demand for loans in the whole society is relatively insufficient has not been fundamentally changed. The effective demand for loans is relatively insufficient, mainly due to the decline in the overall profitability of industrial enterprises nationwide, which leads to the shrinking of credit. In 2005, state-owned and state-holding enterprises realized profits of 644.7 billion yuan, up 17.4% over the previous year, far below the level of 42.5% growth in the same period of last year. Joint-stock enterprises realized a profit of 742 billion yuan, an increase of 28.7%, lower than the growth level of 39.4% in the previous year. In the first quarter of 2006, among the 66 industries surveyed by the National Bureau of Statistics, there were as many as 24 industries with reduced profits or increased losses, an increase of 9 over the previous quarter. The decline in corporate profits and the expansion of losses will directly reduce the credit demand for banks.

(4) The savings of urban and rural residents continued to grow.

At the end of 2005, the savings balance of Chinese residents was 14. 1 1 trillion yuan, the GDP of that year was 18.23 trillion yuan, and the savings rate was as high as 77.36%. In the first quarter of 2006, the balance of national residents' savings deposits continued to grow at a high speed. Compared with China's high savings rate, the global average savings rate is only 19.7% in 200 1 year. The savings rate of rich countries is usually higher than that of poor countries, but it is only about 20%. China's current high household savings rate and China's cultural tradition? Social structure? Family values and many other factors. One of the main reasons for the high savings rate of residents is that the reform of the social security system has not yet been completed and there is no perfect old-age insurance? Unemployment and medical insurance system, ordinary people pay pensions? Medical care and other reasons have accumulated a large number of preventive savings. At the same time, the uncertainty of future income makes residents more inclined to increase savings and reduce consumption. What about the housing system? The reform of the education system has also enabled a considerable part of public savings funds to be used for housing and children's education savings, which is one of the reasons for the high savings rate. [3]

Three? The influence of excess liquidity of China banks on the effectiveness of monetary policy

(A) the definition of the effectiveness of monetary policy

Although different scholars have different definitions of the effectiveness of monetary policy due to different emphases, fundamentally speaking, the effectiveness of monetary policy includes at least two meanings: First, can monetary policy affect output? The influence and extent of real economic variables such as employment; Second, whether the monetary authorities have the ability to use monetary policy to guide economic operation and achieve established macroeconomic goals. The first meaning refers to the force of monetary policy on the actual economic operation, that is, can monetary policy affect output and to what extent? The influence of real economic variables such as employment can be summarized as the theoretical effectiveness of monetary policy, which is the basis of the effectiveness of monetary policy. If monetary policy can really have an important impact on the real variables (output and employment) in the economy, then monetary policy is effective in theory, which is called theoretical effectiveness of monetary policy; If monetary policy can't affect the actual variables in economic operation at all, or the influence can be ignored, then the effectiveness of monetary policy can't be discussed, and monetary policy is invalid. The second meaning is based on the first meaning, that is, does monetary policy affect output? Real economic variables such as employment do have strong influence (monetary policy is effective in theory), so within the existing knowledge, can monetary policy authorities use the influence of monetary policy to guide economic operation in order to achieve the established macroeconomic goals? This can be summarized as the effectiveness of monetary policy. If both theoretical and empirical evidence show that monetary policy has an important influence on real economic variables, and the monetary authorities can also use the effectiveness of monetary policy to achieve the established macroeconomic goals, then monetary policy is effective; On the other hand, if monetary policy is effective in theory, but the monetary authorities can't use this effectiveness to guide the economy to run on the expected track, the implementation of monetary policy is invalid, and the effectiveness of monetary policy is just empty talk and has no practical significance. [4]

Judging from the above definition of the effectiveness of monetary policy, the influence of bank excess liquidity on the effectiveness of monetary policy studied in this paper belongs to the effectiveness of monetary policy implementation, including the influence of monetary policy tools on excess liquidity and the influence of bank liquidity on the transmission mechanism of monetary policy.

(B) China's monetary policy tools in solving the problem of excess liquidity.

1. Increase the deposit reserve ratio to reduce the bank's insufficient liquidity. Since 2006, the central bank has raised the deposit reserve ratio twice, from 7.5% in 2004 to 8.5%, and the foreign exchange deposit reserve ratio from 3% to 4%. In a month or so, the central bank can directly freeze about 300 billion yuan by raising the statutory deposit reserve ratio twice. Coupled with the multiplier effect, the actual tight liquidity may reach about 1.2 trillion yuan. In a sound financial system, raising the statutory deposit reserve ratio can effectively reduce the overall liquidity. However, in view of China's current financial system arrangement and the causes of bank liquidity, the effect of raising the deposit reserve ratio is not obvious. This is mainly because: firstly, the foreign exchange account caused by the compulsory foreign exchange settlement and sale system has become an important channel for the central bank to put in the base currency. At present, China's base currency is not fully used according to the needs of economic development, but is mainly used to balance international payments. The central bank raised the deposit reserve ratio 1 percentage point within one month, but the credit of commercial banks still maintained a high growth. One of the important reasons is that the central bank lacks effective measures for write-off through the base currency invested in foreign exchange. Secondly, raising the deposit reserve ratio has little effect on the liquidity of wholly state-owned commercial banks, and its lending behavior is difficult to be restrained. State-owned commercial banks have sufficient liquidity and strong ability to absorb liquidity. At the same time, state-owned commercial banks are national debt? Policy financial bonds? The main holders of central bank bills can meet the liquidity demand in time by selling or repurchasing, and even if there is liquidity difficulty, they can obtain refinancing from the central bank. As the wholly state-owned commercial banks have an absolute advantage in China's financial system, their profit-seeking opportunities greatly reduce the effect of the central bank's credit crunch. [5]

2. Interest rate adjustment has little effect on excess liquidity. In April 2006, the central bank raised the benchmark interest rate of financial institutions, and the benchmark interest rate of financial institutions was raised by 0.27 percentage points to 5.85%. In a mature financial market, interest rate, as a powerful means of price control, can effectively guide the contraction and expansion of financial market funds as long as the central bank takes small steps? Continuous measures to raise interest rates will gradually show the effect of raising interest rates. However, because the relationship between various interest rates in China has not been straightened out, the role of benchmark interest rate as a policy tool is still very limited. The central bank's method of determining the loan interest rate of financial institutions can not meet the needs of pre-adjustment and fine-tuning of monetary policy, and can not give full play to the comprehensive effect of coordination of monetary policy tools. Judging from the actual effect of previous interest rate changes, corporate loans and residents' savings deposits are not sensitive to interest rate changes, and the effect of interest rate policy is small.

3. The ability of open market operation to "hedge" liquidity is limited. Open market operation is a policy means for the central bank to adjust the base money by buying and selling securities in the money market, so as to adjust the money supply or interest rate. In recent years, the open market operation has gradually become the most frequent and dependent policy tool for the macro-control of the People's Bank of China, which has played an important role in controlling the total money supply and guiding the market interest rate. At the beginning of the central bank's open market operation, the main target was the national debt market, but the number of short-term national debt was very small, only about 30% of the issued national debt could be listed and circulated, and the variety and term structure could not meet the needs of monetary policy operation, thus limiting the central bank's ability to use national debt for open market operation. Since 2002, the central bank has tried to use central bank bills, effectively offsetting the pressure of increasing foreign exchange reserves. However, due to the limitations of central bank bills as an interest rate (price) adjustment tool, the central bank seems to be in a weak position in dialogue with the market (Li Yang, 2004). [6]

There is also a situation worthy of attention, that is, the role of local currency open market operation on the base money supply is often diverted by the influence of foreign currency open market operation. Due to China's de facto fixed exchange rate system, with the economic weakness of the United States in recent years, the trade deficit and current account deficit have risen to record highs, and the dollar has continued to depreciate sharply, and international investors have sold a lot of dollars. In order to maintain a relatively fixed exchange rate system, the central bank has to put in more base money to buy dollars. Therefore, in the direction of monetary policy, the central bank has fallen into the problem of preventing excessive money supply. The dilemma of maintaining a relatively fixed exchange rate. Due to the rigidity of the fixed exchange rate system, the central bank's bills are constantly expanding, thus reducing the ability of the central bank's bills to "hedge" liquidity.

(C) The impact of excess liquidity of China banks on the transmission mechanism of monetary policy.

1. Current situation of monetary policy transmission mechanism in China. Before the reform and opening up, the transmission channel of China's monetary policy was: People's Bank → branches of People's Bank → enterprises. The transmission process was simple, directly from policy means to the ultimate goal. In the 1980s after the reform and opening up, with the establishment of the central bank system and the improvement of the financial organization system, the monetary policy formed a transmission system of "central bank → financial institutions → enterprises", and the money market has not yet fully entered the transmission process. After entering the 1990s, the mode of financial macro-control gradually changed, initially forming a transmission system of "central bank → money market → financial institutions → enterprises", and initially establishing an indirect transmission mechanism of "policy tools → operational objectives → intermediate objectives → ultimate objectives". Indirect supervision has been expanding since the mid-1990s. The ultimate goal of monetary policy is to stabilize the currency and promote economic development; The intermediary goal and operational goal of monetary policy shift from loan scale to money supply and base money; Deposit reserve? Interest rate? Central bank loan? Discount again? Indirect control measures such as open market operations have been gradually expanded. At present, an indirect control system has been basically established, which takes stabilizing the currency as the ultimate goal, the money supply as the intermediate goal, and uses a variety of monetary policy tools to control the base currency (operational goal).

2. The influence of excess bank liquidity on the operational objectives of monetary policy. The overall liquidity of China's financial market is relatively high, with M2/GDP close to 2 times, which is rare in both developed and developing countries. The overall liquidity is too high, and the contradiction during deflation is not prominent. When it comes to inflation, the excessive liquidity accumulated over the years will bring great pressure to the macro-control of the central bank. When the central bank's regulation intention needs to loosen monetary policy, the "loose" money may not necessarily flow to the industries and enterprises in the central bank's regulation intention, nor may it be able to recover money from the industries and enterprises in the central bank's regulation intention when the central bank's regulation intention needs to tighten monetary policy. The continuous large excess of liquidity will inevitably have a negative impact on the realization of the operational objectives of monetary policy. At present, the main source of bank excess liquidity is the large increase of foreign exchange holdings, so the impact of bank excess liquidity on the operational objectives of monetary policy is the impact of foreign exchange holdings on the operational objectives of monetary policy, that is, the impact of foreign exchange holdings on the base money supply. [7]

Judging from the goal of exchange rate policy, exchange rate stability is the goal of monetary stability. Under the current exchange rate management system, the central bank can only passively absorb foreign exchange in order to stabilize the RMB exchange rate. The more foreign exchange is purchased, the more money is supplied. As a result of the operation of the foreign exchange write-off policy, the proportion of foreign exchange accounts for a rapid increase, while the proportion of money delivery methods such as refinancing continues to decline. As foreign exchange accounts for more and more, in order to control the base money in a moderate range, the central bank is forced to issue central bank bills and recover or reduce credit loans such as refinancing accordingly to control the total supply of base money. [8] Due to the uneven distribution of foreign exchange resources, the distribution ratio of money between export-oriented enterprises and inward-oriented enterprises is seriously unbalanced, which greatly restricts the central bank's autonomy in supporting an industry or industry through credit tilt. The funds of export-oriented enterprises are relatively abundant, and the shortage of liquidity of domestic enterprises is even worse. Similarly, the regional distribution of money supply is unbalanced. The developed coastal areas with a high degree of opening to the outside world have relatively sufficient funds, while the inland areas with a low degree of opening to the outside world will be relatively short of funds. This structural imbalance of capital flow will be aggravated with the increase of the proportion of foreign exchange.

Four? Countermeasures and suggestions to solve the excess liquidity of banks in China

(A) reduce liquidity in the banking system's multi-strategy.

1. Vigorously develop the capital market and reduce the dependence of enterprises on bank credit. Formulate loose policies to encourage all kinds of funds to enter the capital market; Establish a new market access mechanism to provide domestic listing financing channels for outstanding enterprises, especially small and medium-sized enterprises with high technology content. The healthy development of the capital market can provide a good guarantee for the good operation of the economy, enterprises will get more financing channels and residents will get more investment opportunities, thus reducing the deposit gap of banks.

2. Promote the diversification of bank asset structure through institutional innovation. First of all, establish a universal bank, so that banks can increase income and spread risks through diversified investment. For example, banks can increase investment channels through stock investment. At present, although the proportion of bank loans in total assets in China has been reduced to 65%, for large foreign banks, loans are generally around 40%. Secondly, increase the types of loans for individuals and small and medium-sized enterprises, and increase the quality assets of banks. Thirdly, to speed up the pace of bank asset securitization, banks can convert medium and long-term assets into funds, encourage residents to buy bank bonds, promote the mutual transformation of investment and savings, change the current state of single bank assets and increase the profitability of banks.

3. Improve the social security and medical security system and update residents' consumption concept. Establish and improve social security and medical security systems, provide good services for all citizens, and create a good environment for residents' expected consumption. For residents, it is necessary to further update their consumption concepts and be good at using personal consumption loans such as housing provided by banks to increase consumption and improve their living standards.

(b) Reduce foreign exchange reserves, strengthen market functions and improve the effectiveness of monetary policy.

1. Further deepen the reform of the foreign exchange management system, divert foreign exchange reserves, ease the pressure on foreign exchange, and curb the momentum of continuous growth of liquidity from the source. Reform the current foreign exchange settlement and sale system, gradually transition from compulsory foreign exchange settlement and sale to voluntary foreign exchange settlement and sale, relax the foreign exchange retention ratio of all export-receiving enterprises, change the management of foreign exchange settlement turnover limit to proportional management, and gradually increase the proportion of foreign exchange held by various market entities. Reduce the base currency invested by the central bank through foreign exchange. The foreign exchange account policy should be adjusted in the direction of diverting foreign exchange from the market, promoting trade and investment facilitation, supporting enterprises to go global, and changing the long-term inflow of foreign capital in the field of foreign exchange management in China. Difficult to flow out; Strict with enterprises? Loose to individuals; Strict with domestic capital? The asymmetric management pattern of foreign capital will gradually broaden the channels of capital outflow, allow and expand international development institutions or enterprises to issue RMB bonds or raise funds in other forms of RMB financing in China, and reduce the pressure of RMB appreciation. Stick to the initiative? Based on the principles of controllability and gradualism, according to the needs of China's own reform and development, and on the premise of ensuring financial market and economic stability, we will further expand the floating range of RMB exchange rate and reasonably determine the target area of RMB exchange rate. By establishing the RMB exchange rate target zone, we can send a clear signal to the market, enhance the public's psychological expectation of the exchange rate, enable market traders to react freely according to the market signal, timely alleviate and release the influence of various unfavorable factors in the foreign exchange market, make the implementation of the central bank's monetary policy as free as possible from external factors, and increase the room for manoeuvre in monetary policy regulation. [9]

2. Further improve the market infrastructure, consolidate the market foundation, and broaden the central bank's monetary control space. Through the market mechanism, commercial banks can independently decide the trading behavior of the foreign exchange market and diversify China's foreign exchange market on the basis of the market maker system? Disperse the market. It is necessary to expand the trading subjects in the foreign exchange market and change the homogenization of trading subjects in China's foreign exchange market at present. Relax market access restrictions and increase market trading entities and non-bank financial institutions? Large enterprise groups can gradually directly enter the inter-bank market to participate in transactions. Vigorously carry out product innovation, start and expand inter-bank forward foreign exchange transactions as soon as possible, and gradually introduce swaps? Futures? Derivatives transactions such as swaps and repurchases enable the market to meet the requirements of providing hedging to participants? Demand for a series of financial services such as risk aversion and investment and wealth management.

3. Further improve the strategies and means of foreign exchange write-off and improve the efficiency of foreign exchange write-off. The first is to establish a foreign exchange stabilization fund. According to international practice, part of foreign exchange funds should come from national foreign exchange reserves, and the other part should mainly come from foreign exchange assets of commercial banks. Through the foreign exchange stabilization fund, an important adjustment lever, a buffer barrier is set up between the central bank and the foreign exchange market to cut off the direct connection between foreign exchange reserves and changes in domestic money volume. The second is to flexibly design and select various write-off tools to expand the number in the portfolio basket. There are many successful experiences abroad in this regard that are worth learning from. For example, the "currency stability bond" issued by the Central Bank of Korea can temporarily replace the underdeveloped open market business. Malaysia's "employee reserve fund" can regulate liquidity, thus transferring the deposits of the government and employee reserve fund from the banking system to a special account of the central bank. [10] Based on China's specific national conditions and actual economic conditions, we should design and select financial instruments and means suitable for intervention and write-off in China's national conditions, consolidate and develop the achievements of exchange rate system reform, improve the level of currency regulation and exchange rate management, and make the RMB exchange rate more flexible and foreign exchange write-off more efficient.