In the six years since the "August 11" exchange rate reform, the two-way volatility characteristics have been enhanced-the


degree of marketization of the RMB exchange rate has risen significantly,


reporter Yao Jin

  As of August 11 this year, the 2015 "August 11" exchange rate reform has been implemented for 6 years.

With the continuous advancement of the reform of the RMB exchange rate formation mechanism, the market has played a decisive role in the formation of the exchange rate. The RMB exchange rate has risen and depreciated, and has two-way fluctuations. The flexibility of the exchange rate has continued to increase, creating conditions for the independent implementation of normal monetary policies.

  Increased volatility in the exchange rate against the U.S. dollar

  On August 11, 2015, the People's Bank of China launched a number of reforms including adjustments to the central parity quotation mechanism of the RMB to US dollar exchange rate and increased reference to a basket of currencies.

The exchange rate reform is considered to be an important step in the market-oriented reform of the RMB exchange rate.

Experts believe that the degree of marketization of the RMB exchange rate formation mechanism has increased significantly, and two-way exchange rate fluctuations have become the norm, which is the biggest change in the six years of exchange rate reform.

  "After the '8.11' exchange rate reform, the degree of marketization of the RMB exchange rate has increased significantly. This is directly reflected in the significant increase in the volatility of the RMB exchange rate against the U.S. dollar compared to six years ago." Wang Qing, chief macro analyst at Oriental Jincheng, believes. This reflects that the trend of the RMB exchange rate is more driven by factors such as changes in economic fundamentals, monetary policy differences, market supply and demand, and foreign exchange market sentiment fluctuations, which better reflects the market orientation of exchange rate reform.

  More importantly, after the "8.11" exchange rate reform, the central bank has maintained the basic stability of the RMB exchange rate at a reasonable and balanced level by continuously adjusting and improving the central rate mechanism and strengthening the macro-prudential management of cross-border capital flows. While the exchange rate reform has improved market efficiency, it has kept the bottom line of systemic financial risks free.

  The "August 11" exchange rate reform captured the "bull nose" of raising the marketization level of the exchange rate formation mechanism.

Guan Tao, the global chief economist of Bank of China Securities, said that the exchange rate reform has optimized market makers' quotations, which is conducive to improving the degree of marketization in the formation of central prices and maintaining price continuity and transparency.

At the same time, the actual operating space of the market exchange rate has been expanded, and the role of exchange rates in regulating the supply and demand of foreign exchange has been better brought into play.

  Lian Ping, Chief Economist and Dean of the Research Institute of Zhixin Investment, believes that the results of the exchange rate reform have brought a series of positive effects on China's macroeconomic and microeconomic aspects.

For example, the increased flexibility of the RMB exchange rate will help withstand the impact of external economic fluctuations, help ensure the stable operation of the macro economy, and, in particular, help prevent monetary policy from getting into trouble in the internal and external balance of the currency, so that monetary policy can focus on responding to the domestic economy. problem.

  Conducive to dealing with external shocks

  Another major effect of the exchange rate reform is to make the RMB exchange rate mechanism a "shock absorber" to deal with external shocks.

  Since the beginning of this year, the two-way fluctuations in the exchange rate of the RMB against the US dollar have become more pronounced.

From the perspective of the central parity of the renminbi against the US dollar, the year-to-date trend has generally shown a trend from rising to depreciation, then from depreciation to rising, and then depreciating again, until recently it has stabilized.

This reflects the increase in the degree of marketization of my country's exchange rate.

  "In the first half of the year, the historical volatility of the RMB against the U.S. dollar exchange rate was 3.1%, which has gradually approached the volatility of the currencies of developed economies such as the euro, the British pound, and the Japanese yen. The flexibility has increased. Under the market-based adjustment mechanism, the two-way volatile exchange rate of the RMB has been compared. Timely, fully and accurately reflected changes in the international market and changes in domestic foreign exchange supply and demand." Wang Chunying, deputy director of the State Administration of Foreign Exchange and spokesman, said that the RMB exchange rate has become more flexible and volatility has increased, but the overall volatility is lower than in emerging economies. Physical currencies are more different from some currencies that often fluctuate sharply.

The renminbi has shown relatively good currency stability.

  Everbright Bank analyst Zhou Maohua believes that since the outbreak of the new crown pneumonia epidemic, the world's major economies have been in trouble successively. The volatility of the financial market has exceeded investors' expectations. The renminbi exchange rate has inevitably been affected, and the volatility has increased.

However, from a horizontal comparison, the volatility of the RMB is relatively small among the major international currencies, making it one of the most stable currencies in the world.

  "The basic stability of the RMB exchange rate provides a good foreign exchange market environment for the export-oriented economy and industries, which helps hedge against procyclical fluctuations in the exchange rate and reduce the exchange rate risk of related companies." Lian Ping said that the increase in exchange rate flexibility will help foster growth. The company's exchange rate risk awareness and exchange rate management capabilities improve its adaptability to exchange rate fluctuations.

In particular, it makes enterprises realize that it is difficult to effectively deal with exchange rate fluctuation risks by their own capabilities, and actively seek help from financial institutions to improve their ability to deal with exchange rate risks.

  Lou Feipeng, a researcher at the Postal Savings Bank of China, believes that after the increase in the degree of marketization and flexibility of the RMB exchange rate, the role of the exchange rate in adjusting the macro economy and the automatic stabilizer of international payments has been better brought into play.

At the same time, the increase in the degree of marketization of the RMB exchange rate formation mechanism will help maintain the independence of my country's monetary policy, expand the scope for independent implementation of normal monetary policies, and apply monetary policies more freely to stabilize macroeconomic operations and respond to external shocks.

  Steadily deepening reform is on the way

  Standing at the time of the 6th anniversary, the external environment has become more complex and severe. What is the next path for the exchange rate reform?

The "Report on the Implementation of China's Monetary Policy for the Second Quarter of 2021" (hereinafter referred to as the "Report") recently released by the Central Bank has pointed out the direction for the main policy ideas in the next phase.

  The "Report" pointed out that it is necessary to steadily deepen the reform of exchange rate marketization, improve the managed floating exchange rate system based on market supply and demand, with reference to a basket of currencies for adjustment, enhance the flexibility of the RMB exchange rate, and give full play to the exchange rate adjustment of macroeconomics and the automatic stability of international payments.器 effect.

  Experts believe that my country's current 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. This is the basis for the two-way fluctuation of the RMB exchange rate.

In general, the two-way fluctuation of the RMB exchange rate is the result of the combined effects of the domestic and foreign economic situation, the balance of payments situation, and the changes in the foreign exchange market at home and abroad. It reasonably reflects the changes in the supply and demand of the foreign exchange market, promotes internal and external balance, and expands the normal implementation of my country’s independent implementation. Room for monetary policy.

  "On the one hand, in the context of increasing global uncertainties and unstable factors, we must continue to deepen the reform of exchange rate marketization, enhance the flexibility of the RMB exchange rate, improve the corresponding macro-prudential policy framework, and escort the stable operation of the RMB exchange rate and cross-border capital flows; another On the one hand, steadily and prudently promote the internationalization of the renminbi, accelerate the construction of international trade clearing and settlement infrastructure and the innovation of foreign exchange derivatives, and reduce the impact of exchange rate fluctuations on Chinese enterprises." Zhou Maohua said.

  Lou Feipeng said that future exchange rate reforms will still need to be promoted in the direction of marketization, increase the proportion of market supply and demand in exchange rate pricing, promote greater flexibility in the RMB exchange rate, and at the same time strengthen macro-prudential management, focus on anticipation management, and guide market entities to establish "risk neutrality." idea.

  "In the future, two-way fluctuations in the RMB exchange rate will be the norm. The RMB may appreciate or depreciate. No one can accurately predict the exchange rate trend." Adjusted and managed floating exchange rate system, rational use of monetary policy tools, strengthening of macro-prudential management of cross-border financing, rational guidance of expectations through a variety of methods, guiding enterprises and financial institutions to establish a "risk-neutral" concept, and maintaining a reasonable and balanced RMB exchange rate Basically stable on the level.

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