The Fed's latest January meeting minutes were dovish, and the Fed's yuan-to-dollar exchange rate rose above the 6.33 mark during the session.
Driven by the sharp rise in the central parity rate, on February 17, the spot exchange rate of the RMB against the U.S. dollar rose above the 6.33 mark after opening at 6.3320, and the highest appreciation reached 6.3289. This is the first time the spot exchange rate has risen above this level since January 27. a pass.
On February 17, the central parity rate of the RMB against the US dollar was reported at 6.3321, an increase of 142 basis points.
In the early morning of February 17, Beijing time, the minutes of the Federal Open Market Committee (FOMC) monetary policy meeting released by the Federal Reserve in January showed that the U.S. inflation rate was too high and the economy was close to full employment, and there was reason to raise interest rates as soon as possible.
Most participants noted that if inflation did not decline as expected, it would be appropriate for the Committee to unwind easing more quickly than currently anticipated.
"Compared with Powell's statement in the January press conference, there are no more hawkish signals in the latest minutes. The US dollar fell at a high level, but the motivation for the RMB to rise sharply was not enough. The RMB's rise after the year was mostly due to the settlement of foreign exchange by customers. Boosted by strong demand." A foreign exchange trader at a stock exchange in Shanghai told The Paper.
In the face of the change in monetary policy in developed economies, the central bank also expressed special concern in the latest monetary policy report earlier: the central bank expressed concern about overseas inflation "to prevent the risk of inflation expectations de-anchoring", and the wording "mainly based on me" No change, but the position is adjusted to the exchange rate section.
Talking about the impact on the RMB exchange rate, Haitong International believes that due to the divergence of monetary policies between my country and the United States in the new year, it is almost a foregone conclusion that the Fed will raise interest rates. There will be a certain degree of narrowing, and the RMB exchange rate is expected to face depreciation pressure.
However, due to the abnormally abundant US dollar liquidity accumulated in my country in the past two years, it will effectively play a "buffer" role in exchange rate fluctuations, and it is difficult for the renminbi to "fall sharply".
Under the circumstance of a flexible exchange rate and standardized capital management, my country's policy will still be "me-based".
Societe Generale Research believes that the short-term RMB exchange rate against the US dollar will continue to fluctuate within a narrow range.
A more pronounced fix for overvaluation may require stronger changes in external factors, including the traction of faster appreciation of the U.S. dollar index, accelerated tightening of domestic U.S. dollar liquidity, reversal of cross-border capital inflows, and more.