Chinanews client, Beijing, October 10 (Reporter Li Jinlei) On the first trading day after the National Day holiday, the exchange rate of Renminbi, which had been holding back for 8 days, has appreciated sharply again, rushing into hot searches.
Exchange 100,000 US dollars after the holiday can save 3050 yuan
According to data from the China Foreign Exchange Trading Center, on October 9, the central parity of the RMB against the US dollar was 6.7796, an increase of 305 basis points from the last trading day before the holiday.
Screenshot of the central parity of the RMB against the US dollar.
The onshore and offshore RMB exchange rates have also skyrocketed.
The data shows that the onshore RMB exchange rate against the US dollar supplemented by nearly 1,100 points, and the offshore RMB exchange rate against the US dollar once rose above the 6.7 mark in intraday trading, setting a new high since last April.
The sharp appreciation of the RMB exchange rate can reduce the exchange cost, and you will need less RMB to exchange the same amount of US dollars.
You can do a simple calculation: on September 30, the central parity of the RMB against the US dollar was 6.8101, and on October 9, it was 6.7796.
From 6.8101 to 6.7796, if you exchange 100,000 US dollars before the National Day, then you need 681,100 yuan, and after the National Day, you only need 677,96 yuan.
In other words, after a holiday, you can save RMB 3,050, which means you can save money on buying a mid-to-high-end mobile phone.
The bank staff is counting the currency.
Zhang Yunshe
Onshore RMB's single-quarter rise hits a 10-year high
In fact, before the National Day, the renminbi exchange rate went out of a wave of momentum.
From a long-term perspective, on May 29, the central parity of the RMB against the US dollar was 7.1316. In just over four months, the central parity of the RMB against the US dollar appreciated by 3,520 basis points.
The onshore RMB exchange rate against the U.S. dollar has risen by more than 4,000 points, and the offshore RMB exchange rate against the U.S. dollar has risen by nearly 5,000 points, and has now returned to the level of mid-to-late April 2019.
Statistics show that in the past three quarters, the onshore renminbi rose 3.89% against the US dollar, the largest single-quarter increase since the first quarter of 2008.
Looking at the global exchange rate market, with the weakening of the US dollar, non-US currencies, including the renminbi, have generally seen an appreciation trend.
Xie Yunliang, chief macro analyst at Minsheng Securities, said that from the perspective of major global currencies, the appreciation of the renminbi is not too strong.
Considering that the U.S. dollar began to depreciate after the Federal Reserve announced an unlimited amount of QE on March 23, March 23 was set as the base date.
Since the base date, the U.S. dollar index has depreciated by 8.6%, the British pound, the euro, and the Japanese yen have appreciated by 12.1%, 9.7%, and 4.9% against the U.S. dollar, respectively, and the RMB has only appreciated by 4.2% against the U.S. dollar.
RMB and USD data map.
Source Visual China.
Why does the RMB exchange rate continue to soar?
Regarding the reason for the strengthening of the RMB exchange rate, Wen Bin, the chief researcher of China Minsheng Bank, told a reporter from Chinanews.com that first, China's economic fundamentals continued to be supported; second, the dollar index continued to fall, and non-US currencies including the RMB appeared. The trend of appreciation; third, international investors are optimistic about China’s economic prospects and RMB assets, and foreign capital continues to flow into China’s capital market, driving the appreciation of the RMB.
At present, China's economy maintains a steady recovery and positive changes are constantly increasing.
In September, China’s Purchasing Managers’ Index all rebounded significantly. Among them, the Manufacturing Purchasing Managers’ Index, Non-manufacturing Business Activity Index and Comprehensive PMI Output Index were 51.5%, 55.9% and 55.1%, up 0.5, 0.7 and 0.6 respectively from the previous month. The three major indexes have been above the threshold since March.
The World Bank released the East Asia and Pacific region economic report on September 28, raising the forecast for China's economic growth this year to 2%, one percentage point higher than the June forecast, and forecasting that the Chinese economy will grow by 7.9% next year.
The chief analyst of CITIC Securities’ fixed income stated clearly that, in the context of the easing of global central banks, the Central Bank of China remained cautious and maintained its monetary policy during the epidemic, the Sino-US interest rate gap remained high, and the attractiveness of RMB assets has increased significantly. Promoted the strengthening of the RMB exchange rate.
Wen Bin pointed out that international investors are optimistic about China's economic prospects and RMB assets, and that foreign capital continues to flow into China's capital market, which is conducive to the appreciation of RMB.
Wind data shows that on October 9th, northbound funds poured into A shares unilaterally in early trading, and the northbound funds purchased a substantial net purchase of 11.267 billion yuan throughout the day. The single-day net purchases hit a new high since July 6.
Data map.
The trend of RMB strength is expected to continue
Many institutions expect that with the strong domestic economic recovery and continued expansion of US dollar liquidity, the trend of RMB strength will continue.
Xie Yaxuan, chief macro analyst at China Merchants Securities, believes that from a three- to six-month period, it is expected that the dollar index will continue to fall and the yuan will continue to rise.
"I have recently repeatedly emphasized that the renminbi has entered a clear appreciation cycle since the end of May. Although the renminbi will fluctuate significantly in this appreciation cycle, from the perspective of time trends, the renminbi will generally appreciate in general."
Obviously, the strength of the RMB exchange rate may continue. However, considering the possible subsequent risks, including global risk aversion, Sino-US relations and asymmetric capital controls, the RMB exchange rate may show a slower rate of appreciation. The RMB exchange rate range may be 6.7-6.8.
Li Chao, chief economist of Zheshang Securities, believes that the new center of the exchange rate of the RMB to the US dollar is expected to be around 6.75. The RMB exchange rate is currently fluctuating in a new range. As the domestic and foreign situation may still change significantly, there is no basis for continuous appreciation or devaluation. The probability of wide fluctuations in the future is greater.
Data map of Guangzhou Baiyun Airport.
What is the impact of the sharp appreciation of the RMB?
For ordinary people, the appreciation of the renminbi means that the money in their hands is more valuable, and it will be more cost-effective if you travel abroad, study abroad, and shop.
Because of the same money, more U.S. dollars can be exchanged for more goods and services.
For enterprises, Wen Bin analyzed that from the perspective of importing enterprises, the appreciation of the renminbi, especially not only against the dollar, but also against a basket of currencies, will reduce procurement costs and increase profits.
However, it will have a greater adverse impact on export companies, and the appreciation of the renminbi will increase the cost of export products and may cause exchange losses.
Therefore, export companies must take measures to prevent and avoid exchange rate risks.
At present, many companies have taken measures to reduce exchange losses.
Recently, a number of listed companies have issued announcements that they intend to carry out forward foreign exchange settlement business to reduce the impact of exchange rate fluctuations on company performance.
For example, Kandely stated that in order to avoid the impact of exchange rate fluctuations, lock in the cost of foreign exchange settlement and export product profits, the cumulative total of the increased forward foreign exchange settlement and sale business should not exceed 21 million US dollars.
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