The impact of RMB exchange rate change on the banking stock prices in China

Abstract

Exchange rate plays an important role in international trade, which connects domestic and international economy. Under the background of economic globalization, every economy in the world can be greatly influenced although the exchange rate changes slightly. Across all industries, the banking industry has the most direct impact on the economy. Thus, the performance of economy can be reflected through the performance of the whole banking industry, and the performance of banks can be shown by the prices of their stocks to some extent. It is necessary to study the impact of RMB exchange rate on the banking stock prices so that the investors can raise their risk awareness and judge the right trend in the stock market.