Abstract
China Yuan has been in the deviation of currency value of internal depreciation along with external appreciation since 2002. The paper, basing on exited literature, summarizes the formation mechanism as: the effect of US dollar depreciation, the effect of the export-oriented development model, the effect of sustained rapid economic growth and the effect of interest rates spreads and other factors. The conclusion implies that currency liquidity, wage rising and international inflation can account for the domestic inflation against the foreign exchange rate depreciation. Hence, in order to explore international experience of currency value deviation, we have made a statistic analysis of G20 economies’ currency growing except US and EU. We find it is universe of currency value deviation. Moreover, we have summarized the currency value relationship as consistency, stray and deviation according to the manifestations exchange rate transmission. Keywords: China Yuan, deviation of currency value, exchange rate pass-through.
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