China News Service, Beijing, October 17 (Li Jinlei and Peng Jingru Cheng Chunyu) The continuous rapid appreciation of the renminbi has aroused concern from all parties.

Tan Yaling, president and chief economist of the China Institute of Foreign Exchange Investment, said in an exclusive interview with China News Agency that the current round of RMB appreciation is due to superimposed factors such as China’s economic improvement and the acceleration of financial market opening. Foreign trade companies are under great pressure, so there is no need to worry about appreciation to push housing prices upward.

Tan Yaling, president and chief economist of the China Institute of Foreign Exchange Investment, accepted an exclusive interview with China News Agency "China Focus Face to Face" to analyze the recent sharp appreciation of the RMB.

Photo by China News Agency reporter Zhang Xinglong

  Tan Yaling said that the current round of RMB appreciation started in June and has not yet ended and the cycle is long.

She believes that the appreciation of the renminbi firstly stems from the improvement of the Chinese economy and people’s confidence in the renminbi.

In addition, since China’s economy is the first to recover, the economy is stable, and the situation of resumption of work and production is good, and China’s financial market has accelerated its opening up, international capital favors the Chinese market in terms of speculation, hedging and arbitrage. This superimposed effect has prompted the influx of funds into the Chinese market. .

Moreover, there are huge gaps in interest rates and exchange rates between China and the United States, and between China and other developed countries.

Moreover, the appreciation of the renminbi does not rule out the deliberate use of overseas borrowings. Taking advantage of China's relatively good momentum and the effect of opening up, the suspicion of deliberately pushing up the renminbi subjectively should arouse great attention.

  Tan Yaling said that China's current export indicators are relatively good, which have a particularly important relationship with policy support, the overall relief of overseas epidemics, and China's position and influence in world trade. However, "the current appreciation of the renminbi is putting great pressure on foreign trade companies."

  The Central Bank of China decided on the first weekend after the National Day holiday this year to lower the foreign exchange risk reserve ratio for forward foreign exchange sales from 20% to 0.

Tan Yaling said that this adjustment was particularly timely and "has had a particularly large impact on the entire exchange rate market. The renminbi has returned from the 6.7 yuan mark to the level below 6.7 yuan."

  Tan Yaling said that there is no need to worry about the appreciation of the renminbi leading to rising housing prices.

She said that the central government’s tone for real estate regulation is that "houses are used for housing, not for speculation." She is very firm. This consensus has basically been reached during the fine-tuning and gradual adjustment of real estate.

The argument of "using a house to make a fortune" has now been basically eliminated.

  She also said that the current round of RMB appreciation has not stimulated the Chinese stock market, and there is no direct relationship between the two.

"Because the exchange rate is a price balance for external relations, and the stock market is a basic manifestation of internal assets and economic fundamentals or corporate development. The two focuses are completely different."

  Tan Yaling reminded that the current renminbi interest rate differential and exchange rate differential, coupled with the huge Chinese market itself, the credibility of policies, and the sustainability of the economy, have formed a very good perception for foreign capital, and capital speculation is inevitable.

At present, a large amount of overseas funds are flowing into China, and we need to be alert to the increasing pressure of domestic asset bubbles and prevent related risks.

(Finish)