This paper combines the demand structure mechanism and the current account mechanism to show that an increase in the share of the elderly population affects the appreciation of the real exchange rate. Based on the formula of the internal real exchange rate and the “Balassa-Samuelson effect”, the transmission mechanism of population aging on the real exchange rate is established. Combining the results of the discussion on the savings rate and investment rate, an analytical model of the impact of population aging on the balance of trade is proposed. Panel models are built with sample data from full sample countries, super-aging countries, deeply aging countries, mildly aging countries and non-aging countries respectively, and heterogeneity analysis is carried out for each type to test the multilevel regression results of population aging on the real exchange rate. The control variables are brought in separately for the benchmark regression of population aging on the size of trade surplus and current account balance. The empirical results of the data regression show that the old age dependency ratio is an important influence on the real effective exchange rate. And if the country is in the stage of super-aging and mild aging, aging leads to the depreciation of the real effective exchange rate. In the stage of deeply aging and non-aging countries, aging leads to real effective exchange rate appreciation. Meanwhile population aging positively affects the trade surplus at the provincial level mainly by affecting the level of savings.
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