Abstract: Based on the measurement of China’s RMB real effective exchange rate from 2001 to 2019, this paper uses the PSTR model to analyze the nonlinear impact of RMB real effective exchange rate on economic growth, and studies its mechanism. The research findings are as follows. (1) The impact of the RMB real effective exchange rate on economic growth exhibits a non-linear characteristic: when the exchange rate is low, the promotion effect of exchange rate depreciation is weak, while when the exchange rate is high, the effect is strong. (2) The depreciation of the real effective exchange rate affects economic growth through three main channels: international trade, FDI and household consumption. International trade and household consumption have a positive intermediary effect, while FDI has a negative effect. Compared to low exchange rate levels, international trade has a stronger promoting effect on economic growth at high exchange rate levels, while FDI and household consumption have a weaker promoting effect. (3) From the perspective of regional differences, the promotion effect of exchange rate depreciation on economic growth in the eastern region is stronger than that in the central and western regions; from the perspective of specific impact channels, compared with the central and western regions, international trade in the eastern region has a stronger intermediary effect in the relationship between exchange rate and economic growth, while the intermediary effect of FDI and consumption is weaker.

Key words: real effective exchange rate, economic growth, mediating effect, PSTR