Based on the characteristic of China's exchange rate regime and the foreign exchange management system, this paper constructs an exchange rate model of renminbi (RMB) under current account convertibility. This paper gives economic analysis in detail on changes in supply and demand in the national foreign exchange market, probes the foreign trade behavior, and gives export and import and trade balance equations as well. Econometric results provide evidence that the model can explain the variations of RMB against U．S．dollar exchan gerate quite wel1．