Abstract: Based on the mathematical model of exchange rate passthrough， this paper first analyzes the effect of inflationary environment on exchange rate passthrough. It then applies the smooth transition regression model to give an empirical analysis and the results are as follows: Firstly， the exchange rate passthrough is lower if the inflationary environment is lower and the exchange rate passthrough is higher if the inflationary environment is higher. Secondly， the exchange rate passthrough varies smoothly with the changes of the inflationary environment and the elastic nonlinear threshold value of RMB exchange rate passthrough on imported prices is 0.00197 (the threeperiod moving average). Finally， the current average of monthly inflation is generally beyond the critical value and the imported price level of the exchange rate passthrough is high. Therefore， the government should pay more attention to the increasing imported price level caused by the higher exchange rate passthrough.

Key words: imported inflation, exchange rate passthrough, STR model