Sino-Singapore Jingwei Client, May 28. According to the China Foreign Exchange Trading Center, on the 28th (Friday), the central parity of the RMB against the US dollar rose by 172 basis points, breaking the 6.4 mark to 6.3858, setting a new high since the end of May 2018.
Since the beginning of this week, the central parity of RMB against the US dollar has risen four times in a row, with a cumulative increase of 442 basis points.
Source: China Foreign Exchange Trading Center website
Recently, the RMB exchange rate has continued to rise. This week, the onshore and offshore RMB exchange rates against the US dollar both broke through the 6.4 mark, both hitting new highs in the past three years.
As of press time, the onshore and offshore RMB exchange rates against the U.S. dollar fell slightly during the day. Prior to this, the onshore RMB closed at 6.3840 in the evening trading against the U.S. dollar on the 27th, up 75 basis points from the previous day and night trading; on the 28th, the offshore RMB against the U.S. dollar It was reported at 6.3766 at 4:59 Beijing time, up 78 basis points from late Wednesday in New York, and the overall trading in the intraday trading range was 6.3926-6.3678 yuan.
Regarding the recent appreciation of the renminbi, Kang Chongli, head of the Yuekai Securities Research Institute, said that since April this year, the renminbi exchange rate has returned to a strong trend due to many factors.
First, in April, U.S. Treasury yields and the U.S. dollar index fell, and the US real interest rate fell, and the momentum of economic recovery slowed.
Since May, weak U.S. employment and soaring inflation have triggered fluctuations in U.S. bond yields and the U.S. dollar index.
Secondly, the high prosperity of China's foreign trade, economic recovery, and the development of its own comprehensive strength have increased the attractiveness of domestic assets, increased the demand for RMB, and thus promoted the increase in the value of RMB.
Third, China's production capacity continues to recover, and exports to the United States are expected to continue to maintain a high boom this year. The trade surplus will provide impetus for the appreciation of the renminbi.
Xu Hongcai, deputy director of the Economic Policy Committee of the Chinese Academy of Policy Research, believes that in the short term, the appreciation of the renminbi against the dollar will continue, but the possibility of substantial continuous appreciation is extremely small.
Since the RMB has appreciated by about 10% against the U.S. dollar since May 2020, this appreciation is unsustainable.
Therefore, in the medium term, the RMB against the US dollar will show a relatively stable two-way fluctuation trend.
According to news from the central bank on the 23rd, Liu Guoqiang, deputy governor of the central bank, answered reporters' questions on the RMB exchange rate.
Liu Guoqiang pointed out that since the beginning of this year, the RMB exchange rate has risen and depreciated, floating in both directions, and has remained basically stable at a reasonable and balanced level.
At present, my country’s foreign exchange market is autonomously balanced, the RMB exchange rate is determined by the market, and the exchange rate is expected to be stable.
The future trend of the RMB exchange rate will continue to depend on market supply and demand and changes in the international financial market, and two-way fluctuations will become the norm.
Liu Guoqiang said that the People's Bank of China has perfected a managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies.
This system is suitable for China's current and future exchange rate arrangements.
The People's Bank of China will focus on expected guidance, play the role of exchange rate adjustment macroeconomic and automatic balance of payments stabilizer, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.
On the 27th, officials again spoke on the issue of the RMB exchange rate.
According to the central bank, the seventh working meeting of the national foreign exchange market self-discipline mechanism was held on the same day.
The meeting concluded that the current foreign exchange market is generally balanced.
In the future, there are many market factors and policy factors that affect the exchange rate. The renminbi may appreciate or depreciate.
No one can accurately predict exchange rate movements.
Whether it is short-term or medium-to-long term, the uncertainty of exchange rates is inevitable, and two-way fluctuations are the norm. Governments, institutions or individuals must avoid being misled by predictions and conclusions.
A managed floating exchange rate system based on market supply and demand, adjusted with reference to a basket of currencies, is suitable for China's national conditions and should be adhered to for a long time.
Under this exchange rate system, the exchange rate cannot be used as a tool, neither can be used to depreciate to stimulate exports, nor can it be used to appreciate to offset the impact of rising commodity prices.
The key is to manage expectations and
resolutely crack down on all kinds of malicious manipulation of the market and malicious creation of unilateral expectations.
The meeting emphasized that both enterprises and financial institutions should actively adapt to the two-way fluctuation of exchange rates. Enterprises should focus on their main business, establish a "risk-neutral" concept, avoid deviating from risk-neutral "
" behavior, and
do not bet on the appreciation or devaluation of the RMB exchange rate. Long-term bets will lose.
Not only can financial institutions not help companies "speculate foreign exchange", they should not "speculate foreign exchange" themselves. Otherwise, it will not be conducive to the steady operation of banks and cause exchange rate fluctuations. The foreign exchange self-discipline mechanism must be unremitting, continue to guide enterprises and financial institutions to establish a "risk-neutral" concept, system escort, focus on practical results, implement "I do practical things for the people", and promote the healthy development of the real economy. (Zhongxin Jingwei APP)Keywords: