(Mid-year economic observation) How does the offshore exchange rate hit a low point?
China News Service, Beijing, June 29 (Xia Bin) The impact of the new coronary pneumonia epidemic, the US dollar's apparent liquidity crisis, and the friction game between China and the United States... In the first half of this year, many factors affected the exchange rate of the RMB. The spot exchange rate of the US dollar hit a record low of 7.1964 at the end of May.
6.8, 6.9, 7.0, and 7.1, the RMB exchange rate has repeatedly “turned back and forth” around these key points in the past six months, maintaining flexibility and showing resilience. The US dollar index rose and fell from the 96 range at the beginning of the year to 102.99 in late March, and recently fell back to about 97, basically wiped out the increase last year.
"Although the overall RMB exchange rate weakened in the first half of the year, the trend is not static. If viewed in terms of time course and influencing factors, it generally includes three stages of depreciation. During this period, the RMB has also rebounded." Researcher Wang Youxin of the Bank of China Research Institute told China News Service The reporter said.
He pointed out that the first stage was the impact stage of the domestic epidemic from the end of January to the beginning of February; the second stage was the liquidity crisis of the US dollar and the appreciation of the US dollar, basically in March. With the rapid spread of the epidemic abroad, European and American stock markets fell sharply As a result, the global liquidity crisis and the repatriation of the US dollar have followed, and domestic capital markets have also fluctuated significantly. The third stage is the escalation of friction game between China and the United States. By the end of May, the RMB exchange rate had reached a low point.
But Wang Youxin also emphasized: "With the recent stabilization of the Chinese economy and the increase in resumption of production and production, investment, consumption, exports and other indicators have rebounded. The RMB exchange rate has gradually rebounded from a low level. It is now rebounding to around 7.07 again."
How will the RMB go in the second half of the year? Xie Yaxuan, the chief macro analyst of China Merchants Securities, believes that there is a very good strategy at the very moment. At present, under the huge economic impact brought by the epidemic, it is even more necessary for the United States, China, the Eurozone and Japan to join forces to strengthen the coordination of monetary and exchange rate policies. , Driving the global economy out of a long-term stagnation. Based on this, his benchmark forecast for the US dollar index fell to below 95 in the next two quarters, and the RMB against the US dollar returned to a level of around 7.
"From the perspective of the second half of the year, it is expected that the RMB exchange rate will gradually converge to the range of 6.9 to 7." Wang Youxin believes that from the perspective of economic recovery, compared with developed countries such as Europe and the United States, China's epidemic situation is now well controlled, and the economic machine has restarted and gradually On the right track, the latest IMF projections show that China may be the only major economy in the world that can achieve positive growth this year.
Judging from the trend of the external dollar index, the US epidemic has continued to repeat, the economy is in deep recession, the unemployment rate is high, domestic races and social conflicts have intensified, many states have suspended or suspended economic restarts, the U.S. stock market has once again adjusted pressure, and the Fed does not consider the consequences. The "sequelae" of the quantitative easing policy will also gradually emerge, and it is expected that the US dollar index will gradually fall back to the level of 95 or even lower, and the restriction on the RMB will be weakened.
Wang Youxin also mentioned that domestic and foreign interest rate spreads remain high. Under the background of global easing, the implementation of negative interest rates and zero interest rates, China still has a rare positive income space. As the domestic stock market gradually stabilizes, the attractiveness of RMB assets has increased and cross-border Capital inflows will increase, which will support a stronger RMB exchange rate. "In general, the RMB exchange rate is expected to rebound as a whole in the second half of the year, but adjustment pressure may appear at a time when the Sino-US game and the epidemic are repeated."
Xie Yaxuan also said that whether it is a more effective domestic epidemic control and a more stable economic environment, a steadily improving economic fundamental performance with absolute advantages, or a higher interest rate and higher under the normalization of monetary policy superimposed fundamental factors The level of domestic and foreign interest spreads constitutes a relative advantage in helping overseas capital flow into China's capital market under relatively loose overseas liquidity.
Huang Ka-shing, managing director of Jingshun and head of fixed income in the Asia-Pacific region, said that after the outbreak, the performance of China's national debt was more stable than the assets of other countries, and it could attract many emerging market funds and developed market funds. In recent years, the capital of emerging markets that has flowed into the Chinese market has been slowly compounding growth. It can be seen that many investors are very interested in Chinese government bonds.
Wang Tao, chief economist at UBS China, pointed out that this year’s government work report still mentions “maintaining a stable RMB exchange rate at a reasonable and balanced level”, and that this year’s current account surplus may expand slightly. relatively stable. (Finish)