The rally is like a rainbow! Offshore and onshore RMB have broken multiple barriers, setting a new high in more than a year

　　Sino-Singapore Jingwei Client, September 1st. On September 1, both offshore and onshore RMB appreciated and recovered the 6.82 mark, setting a new high in more than a year.

　　Source: Wind

　　On the morning of September 1, the price of offshore RMB against the U.S. dollar rose by more than 200 points during the day, breaking 6.82, reaching a high of 6.8189; the price of onshore RMB against the U.S. dollar rose by more than 300 points, reaching a high of 6.8181.

　　According to data from the China Foreign Exchange Trading Center, on September 1, the central parity of the RMB against the US dollar was reported at 6.8498, an increase of 107 basis points from the previous day.

　　On August 31, the Central Bank released the white paper "Participating in the Reform of International Benchmark Interest Rate and Improving China's Benchmark Interest Rate System."

The white paper mentioned that in the next stage, the focus of the construction of China’s inter-bank benchmark interest rate system is to promote the extensive use of various benchmark interest rates. Through innovation and expansion of deposit financial institutions’ bond repurchase rates (DR), the The application of interbank deposit certificates and other financial products has made them a key reference indicator for China’s monetary policy regulation and financial market pricing.

　　According to the analysis of Guojin Securities, in the long run, pressure on the depreciation of the US dollar will increase.

There are three reasons for this: First, the potential growth rate of the US economy has declined relative to the advantages of the Eurozone, Japan and other economies; second, the credit and global hegemony of the US dollar is gradually weakening, and third, the US “double deficit” has further increased substantially.

　　Guojin Securities also said that in the short term, although the probability of the U.S. dollar index bottoming out is relatively high, fundamentals and capital flows still support the RMB exchange rate.

In the long run, China's potential economic growth relative to the United States' advantage is expected to increase, China's economic influence in the global economy is expected to increase, and the RMB's position in global transactions and trade is expected to rise, which will support the RMB/US dollar exchange rate in the long run.

(Zhongxin Jingwei APP)