China-Singapore Jingwei Client, March 6th. According to data from the China Foreign Exchange Trading Center, on March 6, the central parity of the RMB against the US dollar rose by 66 basis points to 6.9337, a six-day increase. On the previous trading day, the middle price of RMB against the US dollar was reported at 6.9403, the closing price at 16:30 was 6.9425, and the closing price at 23:30 was 6.9368 at night.
Screenshot source: China Foreign Exchange Trading Center
The central bank announced that the current total liquidity of the banking system is at a reasonable and sufficient level, and no reverse repurchase operation will be carried out on March 6. Wind data shows that no reverse repurchase expires on March 6.
On the news, at 23:00 on March 3rd, Beijing time, the Fed suddenly announced a 50 basis point rate cut. This interest rate cut adjustment is the first rate cut by the Fed in 2020. It is worth mentioning that this rate cut is an emergency emergency rate cut. Previously, the market generally expected the Fed to announce a rate cut at a regular interest rate meeting held in the middle of this month.
In addition, on Thursday, the local time, the US dollar index fell about 0.8% to 96.639, intraday fell to 96.608, the lowest level since January 6. Reuters reports that the currency market expects the Fed to lower its current interest rate target range of 1% -1.25% by another 25 basis points at its next policy meeting on March 18-19, and conduct another 50 basis points before April. Cut interest rates.
Wang Youxin, a researcher at the Bank of China Research Institute, said that there are three main reasons for the continued appreciation of the RMB: First, the US dollar index surged and fell; second, China's new crown pneumonia epidemic gradually improved, and RMB assets have become a global safe-haven asset in the short term. The financial market is picking up, attracting cross-border capital flows.
China Everbright Bank Financial Markets analyst Zhou Maohua said that the uncertainty of overseas economic prospects is still rising, and the central bank and other central banks are opening up to release water. These liquidity needs to be "safe havens". RMB assets are ideal in terms of valuation, economic prospects, and development prospects. The investment target; the current domestic epidemic situation has been effectively controlled, the state has adopted policy hedging measures in a timely manner, the domestic economy is sufficiently resilient, consumers and investors have sufficient confidence in the epidemic prevention and control, and economic prospects, and the policy space is still large. It is foreseeable that a new round of "boom" in foreign capital holdings of RMB assets is brewing.
Haitong Securities said that the Fed's interest rate cut signaled a more stable RMB exchange rate. The 10-year Treasury bond spread between China and the United States has been continuously exaggerated, which has also opened up room for domestic easing. It is expected that LPR will be further guided through policy interest rates and mechanism reforms, and the possibility of adjusting the benchmark deposit interest rate will not be ruled out. (Zhongxin Jingwei APP)