Core Viewpoint - The article presents a systematic assessment of the equilibrium exchange rate of the Renminbi (RMB) from 2010 to 2025 using a dynamic equilibrium measurement model (TVP-BEER), indicating that the RMB maintains inherent stability driven by economic fundamentals despite global financial fluctuations [1]. Summary by Sections RMB Equilibrium Exchange Rate Model Selection - The research identifies four main paths for equilibrium exchange rate studies, including the price benchmark method (PPP), fundamental equilibrium exchange rate (FEER), natural real exchange rate (NATREX), and the BEER method, each with its advantages and limitations [2][3][4]. Introduction of Time-Varying Parameters - The article emphasizes the selection of the BEER framework for estimating the RMB equilibrium exchange rate due to its empirical operability and explanatory power, while introducing time-varying parameters to better reflect the dynamic nature of economic conditions [4]. RMB Effective Exchange Rate Trends - The RMB's real effective exchange rate (REER) has shown phase characteristics over the past 15 years, with significant appreciation driven by productivity differences and improved trade conditions before 2010, followed by stability despite external shocks [7][8]. Comparison of Static and Dynamic Models - The static BEER model captures long-term trends but struggles during structural shifts and external shocks, while the TVP-BEER model provides a more accurate equilibrium estimate, maintaining a deviation of less than 0.5% from actual values during turbulent periods [8][11]. Factors Influencing RMB Equilibrium - The static BEER model indicates significant positive effects from productivity differences and trade conditions on the RMB equilibrium level, while net foreign assets and fiscal spending show negative coefficients, reflecting market concerns about potential risks [13]. Future Outlook for RMB - The RMB is expected to maintain a stable trajectory, supported by ongoing economic structural transformation, consumption upgrades, and steady progress in RMB internationalization, with limited risks of significant deviation from equilibrium [15][18].

Core Viewpoint - The article introduces a dynamic equilibrium measurement model (TVP-BEER) under the framework of Behavioral Equilibrium Exchange Rate (BEER) to systematically assess the equilibrium exchange rate of the RMB from 2010 to 2025, indicating that the RMB maintains inherent stability driven by economic fundamentals despite global financial fluctuations [1] Summary by Sections RMB Equilibrium Exchange Rate Model Selection - Four main paths have formed in the research of equilibrium exchange rates, including the price benchmark method (PPP), fundamental equilibrium exchange rate (FEER), natural real exchange rate (NATREX), and BEER method, each with its advantages and limitations [2][3] Introduction of Time-Varying Parameters - The article ultimately selects the BEER framework for estimating the RMB equilibrium exchange rate due to its empirical operability and explanatory power, incorporating various fundamental and financial variables, and introduces time-varying parameters (TVP) to better reflect changes in economic conditions [4] Data and Measurement Results - The RMB's real effective exchange rate (REER) has shown phase characteristics over the past 15 years, with significant appreciation driven by productivity differences and trade conditions before 2010, followed by stability despite external shocks [5][6] Bilateral Exchange Rate USD/CNY - The USD/CNY exchange rate has also exhibited phase fluctuations, aligning with the equilibrium levels derived from the BEER model, with the TVP-BEER model showing minimal deviation from actual trends during structural shifts [7] Robust Progress Under Equilibrium - The static BEER model indicates significant impacts from various variables on the RMB's equilibrium level, while the TVP-BEER model reveals the dynamic evolution of these determinants, maintaining close alignment with equilibrium despite external pressures [8][9] Future Outlook - The RMB is expected to continue a stable trajectory, supported by ongoing economic structural transformation, policy coordination, and gradual internationalization, with limited risks of significant deviation from equilibrium [10]

Core Viewpoint - The current operational status of the Renminbi (RMB) is in line with its equilibrium level, indicating a positive interaction between fundamentals and the market [1] Summary by Relevant Sections RMB Equilibrium Exchange Rate Model Selection - Four main paths have emerged in the study of equilibrium exchange rates: 1. Price benchmark method, primarily represented by Purchasing Power Parity (PPP), which often underestimates equilibrium rates in developing countries due to various factors [2] 2. Fundamental Equilibrium Exchange Rate (FEER) framework, which links equilibrium to macroeconomic balance but is sensitive to assumptions about current accounts [2] 3. Natural Real Exchange Rate (NATREX) framework, emphasizing the dynamic adjustment of exchange rates based on economic fundamentals, though it has limited operational stability [3] 4. BEER method, which establishes a long-term co-integration relationship between actual exchange rates and a basket of macroeconomic variables, widely used in practical research [3] Introduction of Time-Varying Parameters - The BEER framework was chosen for estimating the RMB equilibrium exchange rate due to its empirical operability and explanatory power. The introduction of time-varying parameters (TVP) allows the model to adapt to structural changes and external shocks, enhancing its responsiveness [4] RMB Real Effective Exchange Rate Trends - The RMB real effective exchange rate (REER) has shown phase characteristics over the past 15 years, with significant appreciation driven by productivity differences and improved trade conditions before 2010. The REER remained relatively stable post-2015, despite external pressures [7][8] TVP-BEER Model Performance - The TVP-BEER model outperformed static BEER during structural shifts and external shocks, maintaining a deviation of less than 1% from actual values, while static models showed deviations of 1% to 2% [8][10] Factors Influencing RMB Equilibrium Level - The static BEER model indicates significant positive impacts from productivity differences and trade conditions on the RMB equilibrium level, while net foreign assets and fiscal spending have negative coefficients, reflecting potential risk spillover effects [12] Future Outlook for RMB - The RMB is expected to maintain a stable trajectory, supported by ongoing economic structural transformation, consumption upgrades, and steady progress in RMB internationalization. The equilibrium exchange rate is projected to remain within the range of 6.9 to 7.2 against the USD, indicating no systemic overvaluation or undervaluation [14]