China-Singapore Jingwei client, July 17th. Data from the China Foreign Exchange Trading Center shows that on July 17, the central parity of the RMB against the US dollar fell by 130 basis points to 7.0043. The central parity of RMB against the US dollar was reported at 6.9913 on the previous trading day. This week, the central parity of RMB against the US dollar has been reduced by 100 basis points.
As of press time, the exchange rate of offshore RMB to the US dollar was reported at 6.9979 and closed at 6.9951 yuan on the 16th. The US dollar reported 6.9994 against the onshore RMB.
Screenshot of China Foreign Exchange Trading Center website
Since the beginning of July, the renminbi exchange rate has strengthened significantly after undergoing nearly a month of shock adjustments. How to view the recent trend of RMB, can the trend of RMB appreciation continue?
The chief fixed income analyst of CITIC Securities clearly wrote that from the perspective of the recent appreciation of the RMB exchange rate, good epidemic prevention and control, continuous improvement of fundamentals and the restraint of the central bank’s monetary policy in the previous period provided bottom support for the RMB exchange rate.
As to whether the subsequent appreciation of the renminbi can continue, it is clear that the three major factors should be focused on the epidemic situation and fundamentals, the central bank's monetary policy and Sino-US relations. It is clearly pointed out that under the influence of fundamental factors and monetary policy factors, the RMB exchange rate is supported in the direction of appreciation, but there is still the possibility of fluctuations in the trend.
It is clearly emphasized that too strong or too weak RMB exchange rate is not the optimal solution. Keeping the exchange rate relatively stable within a reasonable range may be more beneficial to the capital market and the economy as a whole. Therefore, in the future, the RMB exchange rate may use 7 as the center and fluctuate within a controllable range.
On the 16th, the National Bureau of Statistics announced China's semi-annual report. In the second quarter, GDP realized a growth from negative to positive. Guan Tao, global chief economist of BOC Securities, believes that China's economy has the advantage of being the first to recover. The PMI index has been above the boom and bust line for four consecutive months. The performance of exports and utilization of foreign capital has exceeded market expectations. The economy also achieved 3.2% in the second quarter In the second half of the year, the stability of the RMB exchange rate will gradually appear, but it should also be noted that news factors may increase the two-way exchange rate fluctuations. (Sino-Singapore Jingwei APP)