A Comparative Analysis of the Exchange Rate System of the BRICS

In the context of the gradual recovery of the US economy and the poor economic situation in Europe and Japan, the emerging economies are still experiencing rapid growth. The status of emerging economies represented by the BRICS countries on the global stage has been enhanced. The exchange rate, as the main system for foreign exchange of a country, has become a key issue affecting the stable economic development of the BRICS countries. This paper, adopting qualitative analysis, analyzes the development process of the exchange rate system of the BRICS countries, and compares the similarities and differences between the exchange rate regimes between them and the performance after the implementation of the new exchange rate regime. We can find that the choice of the exchange rate system shows that there is no difference between the exchange rate systems. An exchange rate system is suitable for one country, which means a good exchange rate system.

member countries. The name is called the BRICS countries. According to the IMF, these countries have more than 40% of the world's population, accounting for nearly 30% of the world's land, and about 18.3% of global nominal output. In terms of nominal exchange rates, IMF reported that the GDP of China, Brazil, India and Russia in the BRICS countries have ranked among the top 10 in the world, respectively ranking 2 nd , 7 th , 9 th and 11 th , and South Africa ranked 27 th . In concrete terms, Brazil's gross national product ranks first in Latin America. As early as the 1960s and 1970s, Brazil has entered the ranks of sub-developed countries. More than 20 years ago, it had the basic conditions for becoming an economic big country. Russia is the world's largest natural gas exporter and the second largest oil exporter. According to Sohrabji (2009), India is the second most populous country in the world [1]. According to the government of the Indian, the Indian economy has grown steadily at an average annual rate of 5. As for the evolution of the classification of exchange rate systems, IMF used the nominal classification method for the classification of exchange rate systems in various countries prior to 1999. Under this method, IMF divides the exchange rate system into three categories according to the officially announced exchange rate notice: pegged exchange rate system, limited elastic exchange rate system and large flexible exchange rate system. Since this classification method is relatively crude and cannot accurately reflect the real status of the international exchange rate system. So after 1999, IMF further began to divide the exchange rate system based on the size of the exchange rate elasticity of each country: no separate legal currency exchange rate, Bureau arrangements, traditional pegs, horizontal interval pegs, crawling pegs, crawling intervals, management floats, and independent floats. However, Jurgen et al. (2007) have views that with the changes in the international economic situation, the drawbacks of this classification method are also increasingly apparent [3]. On the one hand, there are large differences in the real exchange rate regimes of countries under the management floating category. If they are classified as one category in general, they violate the basic principle of avoiding ambiguity in the exchange rate system. On the other hand, the increasing efforts of central banks have also increased the difficulty of obtaining real data, making it increasingly difficult for IMF to define it accurately as one of the eight categories mentioned above. Therefore, in 2009 IMF announced the latest classification of the exchange rate system. Pattnai and Muneesh (2001) thinks this method not only cancels the crawling interval category in the original classification method, but also newly adds three kinds of exchange rate system: stable arrangements, class crawling arrangements and other management arrangements [4]. At the same time, according to more precise statistical standards, the new division method redefines management floats and independent floats, they are classified as floating and free-floating.
Specifically, according to IMF, we have the following classification. The stabilization arrangement is a kind of peg-to-peer arrangement, which means that the volatility of a country's spot market exchange rate is limited to 2% within 6 months or longer under the condition that exchange rate does not fluctuate.
Once a country is classified as a stable arrangement, the country must not only maintain exchange rate stability, but also the exchange rate fluctuations. Michael (2008) thinks that the crawling arrangement refers to the exchange rate with a certain degree of volatility on the basis of the central exchange rate crawling, but the fluctuation range still does not exceed 2% [5]. Moreover, the exchange rate fluctuations under the crawling arrangement are not less than 1% at the same time, which is considered to be the minimum limit of exchange rate fluctuations.
Other management arrangements have the function of managing floats under the old method. The new taxonomy also distinguishes between floating and free floating: the exchange rate under the floating system is mostly determined by the market. Unless there is sufficient evidence to prove that the stability of the exchange rate at this stage is a non-governmental act. Otherwise the exchange rate volatility must break through the 2% limit mentioned in the stable arrangement and crawling arrangement. In the meantime, in order to prevent excessive exchange rate fluctuations, government authorities can intervene directly or indirectly. The free-floating system has stricter requirements on the exchange rate.

The Evolution of the Exchange Rate System of the BRICS Countries
According to the classification of IMF (2009), Brazil, India, and South Africa implement a free floating exchange rate system, while China and Russia implement a system of managing floating exchange rates [7].
According to Huang and Chen (2012), the exchange rate of the RMB can be roughly divided into five stages after the 1980s: 1) 1981-1984: China adopts a dual exchange rate system, and implements an internal settlement rate with quotas for foreign trade import and export commodities [8]. have fallen sharply, from $3.1 billion in 1990 to $975 million in July 1991 (even below the country's one-month import) [13]. In 1991, the currency of Indian

Analysis of the Similarity and Difference of the Exchange Rate System in BRICS
The BRICS countries have the same effect in the development of the exchange rate system. Basically, each country has undergone a change of fix exchange rate to a managed floating exchange rate system. I think there are three reasons why the BRICS countries have a relatively similar evolution of the exchange rate regime. Firstly it is needed within a country. As the fastest-growing countries in the emerging economies, the BRICS countries need to have more flexible and more market-compliant exchange rates to escort. The import and export business of enterprises or the national foreign exchange reserve management project need a more close to the marketized exchange rate system to manage the exchange rate changes of the country. Therefore, the managed floating exchange rate system can play a good role as a bridge between the single exchange rate system of a certain currency and the development of a free floating exchange rate system. Second, the international economic situation needs it.

Conclusions
From the above analysis, we can draw the following conclusions. First, the selection, change, and implementation of the BRICS exchange rate system are based on the country's economic structure, trade structure, international environment, and internal policies. Therefore, by comparing the differences in the choice of the exchange rate system between the BRICS countries and the performance after the implementation of the new exchange rate system, we can find that the choice of the exchange rate system fully shows that there is no difference between the exchange rate system. The country must choose a desirable exchange rate system based on the actual economic situation.
In summary, by comparing the evolution of the exchange rate system in the BRICS countries, we can learn from the experience and lessons of other countries in the reform of the exchange rate system, so that we can better improve China's exchange rate system. On the one hand, Chinese future exchange rate system will be more liberalized and closer to the market. In the process of RMB internationalization, exchange rate marketization is an indispensable step. On the other hand, it is necessary to effectively control the intensity and frequency of the central bank's intervention in the RMB exchange rate. Moderate intervention in the exchange rate is necessary, but too large or too frequent interventions can lead to more substantial changes in the exchange rate. The volatility of the RMB exchange rate has leverage and long-term influence. Therefore, every implementation of exchange rate intervention will have far-reaching effects, so we must be cautious.

Conflicts of Interest
The author declares no conflicts of interest regarding the publication of this paper.