Sino-Singapore Jingwei Client, August 31. According to the official website of the China Foreign Exchange Trading Center, on the 31st, the central parity of RMB against the US dollar reported 6.8605, an increase of 286 points, a new high since May 14, 2019. On May 14, 2019, the central parity of RMB against the US dollar was reported at 6.8365.
Source: China Foreign Exchange Trading Center
Zheshang Securities believes that the recent rapid appreciation of the renminbi exchange rate is supported by several logics: First, my country’s economy has taken the lead in recovering after the epidemic, and China’s fundamentals have an advantage over the United States; second, my country’s monetary policy margins have tightened short-end liquidity and market interest rates have risen. The spread between China and the US has widened. Since April, my country’s foreign exchange reserves have increased for four consecutive months, and the balance of payments and exchange rate have strengthened each other.
Zheshang Securities predicts that the unexpected appreciation of the renminbi in the future may come from the centralized settlement of the physical sector and the unexpected decline of the US dollar. The U.S. dollar index is also a source of uncertainty. The domestic economic and political situation in the United States is unstable. European fiscal stimulus policies were first introduced in July. The economic prospects of Europe and Japan are stronger than those of the United States. If the U.S. dollar declines more than expected, it will also greatly boost the yuan.
Oriental Jincheng analyzed that since August, the RMB has continued to appreciate as a whole. In the future, the fundamental support for the stable operation of the RMB will not weaken, and the overall trend will be stable and rising, but the characteristics of two-way fluctuations will be more obvious.
Liu Yiju from the Bank of China Research Institute also said in an interview with the media that since the second half of the year, the RMB exchange rate has continued to appreciate and it is expected that the RMB exchange rate will continue to strengthen during the year. (Zhongxin Jingwei APP)