Abstract: The “8.11 exchange rate reform”is an attempt of the central bank to promote the marketization of exchange rate to transit into the floating exchange rate system. Through employing the extended Taylor rule and constructing a TVP-SV-BVAR model, this paper conducts an analysis of the core influencing factors of RMB exchange rate. Then it takes the reform of RMB exchange rate formation mechanism in various stages as the node to compare the changes of influencing factors before and after the “8.11 exchange rate reform”. The results show that capital account openness, exchange rate expectations, inflation differences, interest rate differences and output gap differences have significant time-varying impacts on RMB exchange rates. Therefore, when formulating macro policies, the central bank should pay attention to the interaction of the influencing factors, reasonably arrange the opening path of capital account, and effectively guide the market expectations, so as to ensure the stable and effective development of China's economy.

Key words: “8.11 exchange rate reform”, the extended Taylor Rule, TVP-SV-BVAR model, capital account openness