Since the beginning of this year, the external environment has become more severe and complex, and the tightening of monetary policies in major developed economies has accelerated, which has had a greater impact on global cross-border investment and financing.

Against this background, how do you view the relevant risks of my country's foreign debt?

The Fed tightens monetary policy and the yen and euro depreciate. How do you view the prospect of the RMB exchange rate in the second half of the year?

　　External debt remains reasonable and orderly

　　Currently, global liquidity tends to tighten, external financing costs rise, and my country's external debt balance declined in the first quarter.

The latest external debt data released by the State Administration of Foreign Exchange shows that at the end of the first quarter, the full-scale external debt balance was US$2,710.2 billion, a decrease of US$36.4 billion, or 1%, from the end of the previous year.

Regarding this change, Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, believes that it is relatively mild: "Under the influence of various complex external factors such as the accelerated tightening of the Fed's monetary policy, China's foreign debt will remain reasonable and orderly for the current and future periods. Development trend. In the next step, the foreign exchange bureau will strengthen the monitoring and analysis of the foreign debt situation to effectively prevent possible risks.”

　　First, the increase in external debt was relatively stable.

In recent years, the ratio of my country's full-scale external debt to GDP has always been between 14% and 16%. The increase in external debt matches the development of the real economy, and there is no excessive accumulation.

"During the current round of the Fed's loose monetary policy, there has been no continuous and concentrated cross-border financing, which means that my country's foreign debt has not been over-leveraged, so the risk of deleveraging should be considered controllable." Wang Chunying said that recently, external When the environment adjusts, the RMB exchange rate becomes more flexible, continues to show a two-way fluctuation pattern, and the exchange rate is expected to be relatively stable, so the risk of excessive deleveraging of external debt is not high.

　　Second, my country's external debt structure has been continuously optimized.

The increase in foreign debt this year mainly comes from the investment of domestic RMB bonds by overseas institutions, most of which have long-term investment needs.

The increase in traditional financing external debt is relatively small, and the structure, currency structure and term structure of China's external debt have been optimized.

At the same time, the comparative structure of my country's external assets and liabilities is also being optimized. On the whole, China is still a net external creditor country, with various types of external assets exceeding various types of external liabilities by US$2 trillion, which is shown in the international investment position statement in the first quarter. Net external claims are $2 trillion.

　　Data show that at the end of the first quarter, the balance of external debt of banks, enterprises and the private sector was US$2.1 trillion, accounting for 79% of the total balance of external debt. size of foreign debt.

Debt assets are mainly bonds, deposits and loans and other assets with relatively high liquidity.

"Under the effective adjustment of the foreign exchange market, banks, enterprises and other private sectors have the conditions and ability to meet their debt repayment obligations and achieve independent matching of external assets and liabilities." Wang Chunying said.

　　Third, China's foreign debt safety indicators remained stable.

my country is a net saving country, and the current account continues to maintain a certain size of surplus.

Judging from several specific indicators for measuring solvency, the external debt debt ratio, debt ratio and debt service ratio in 2021 are all within the internationally recognized safety line, and far below the overall level of developed and emerging market countries.

From the perspective of short-term liquidity, my country's foreign exchange reserves currently ranks first in the world, and the ratio of short-term foreign debt to foreign exchange reserves is 45%, which is also far below the 100% requirement of the international warning line.

　　According to Guan Tao, the global chief economist of BOC Securities, in order to prevent and defuse foreign debt risks, it is necessary for the government and the market to strengthen the research and judgment on the marginal changes of domestic and foreign situations, improve the monitoring of cross-border capital flows, and formulate plans to deal with capital flow reversals. .

In addition, the flexibility of the RMB exchange rate should be enhanced, and the exchange rate should further play its role as a “shock absorber” to adjust the balance of payments and absorb internal and external shocks; continue to prudently promote institutional financial opening including the bond market, increase policy transparency, Predictability, improve the liberalization and facilitation of transactions, and attract medium and long-term capital inflows.

　　Cross-border funding has limited impact

　　At present, in the face of inflation that has been rare for many years, most of the world's economies are accelerating the pace of monetary tightening, and emerging markets are facing the pressure of capital outflow and exchange rate depreciation.

Whether the cross-border capital flow in my country is stable or not has become the focus of attention of many parties in the market.

In this regard, many experts believe that at present, we are more confident and more qualified to effectively resolve the impact of the Fed's monetary policy adjustment on China's cross-border capital flows.

China's foreign exchange market is expected to continue its stable operation.

　　my country's comprehensive strength is stronger, and it can better exert its ability to absorb external shocks.

In recent years, China's economic development has become more balanced, coordinated and sustainable.

Last year's GDP was 2.1 times that of 2012, and its proportion in the global economy increased from 11% in 2012 to more than 18%. The country's economic strength, scientific and technological strength, and comprehensive national strength have all reached a new level.

Recently, my country has effectively coordinated epidemic prevention and control and economic and social development, major macroeconomic indicators have stabilized and rebounded relatively quickly, and the economy has generally maintained a momentum of recovery and development.

In June, the manufacturing purchasing managers index has returned to above the line of prosperity and decline, consumption and investment are also continuing to rebound, and economic growth momentum has increased.

With the implementation of various policies to stabilize growth, China's economy will gradually recover and maintain steady growth in the future.

　　my country's balance of payments structure is more stable, which can better ensure the stability and security of cross-border capital flows.

In recent years, the ratio of China's current account surplus to GDP has been around 2%, which is always in a balanced and reasonable range. The balance and stability of the international payments are outstanding among major economies in the world.

At the same time, China's external asset-liability structure has been gradually optimized, and the scale of foreign exchange reserves has ranked first in the world; the private sector holds nearly 6 trillion US dollars in external assets, and the resources to withstand external shocks are more diverse and more abundant; the growth of external debt matches the growth of the economy , and the stability has been improved. All the safety indicators of external debt are within the internationally recognized safety line, and the risks are generally controllable.

　　China's promotion of a higher level of opening up can better expand the depth and breadth of the foreign exchange market.

China's business environment has gradually improved, the negative list for foreign investment access has been implemented, and more foreign companies have come to invest in China.

At the same time, the two-way opening of China's financial market has increased the types of subjects in the foreign exchange market and the types of sources of funds. The depth and breadth of the foreign exchange market has continued to expand, and it is more capable of absorbing or smoothing fluctuations in cross-border capital flows, which is conducive to promoting cross-border capital flows. the overall balance of foreign capital flows.

　　The foreign exchange market adjustment mechanism is more mature, and the function of the automatic stabilizer of the balance of payments adjustment of the RMB exchange rate can be better played.

In recent years, my country has been adhering to the reform of the market-based formation mechanism of the RMB exchange rate. The RMB exchange rate has been floated in both directions, and its flexibility has been enhanced, which can release external pressures in a timely and effective manner.

Moreover, the transactions of market players remained rational and orderly, and expectations were generally stable.

Enterprises are also becoming more risk-neutral in exchange rates and can better adapt to two-way fluctuations in exchange rates.

Therefore, at present, there are more conditions to prevent and resolve the risk of cross-border capital flow through market-oriented means.

　　"The impact of the Fed's monetary policy adjustment on the US dollar interest rate, exchange rate and the impact on the international financial market needs further attention. In fact, the Fed is also faced with a dilemma between controlling inflation and stabilizing the economy. We will further coordinate development and security, pay close attention to external changes, assess the impact in a timely manner, and at the same time promote the reform and opening up in the field of foreign exchange in an orderly manner, so as to effectively prevent and defuse external shocks, Wang Chunying said.

　　The stability of the renminbi is outstanding

　　Exchange rate movements affect the nerves of the foreign exchange market.

Since the beginning of this year, affected by multiple factors such as interest rate hikes by the Federal Reserve and geopolitical conflicts, the main line of changes in the international foreign exchange market has been the strengthening of the US dollar and the weakening of major non-US currencies.

In this context, the exchange rate of the RMB against the US dollar has depreciated to a certain extent, but compared with the major international currencies, the stability of the RMB value is still stronger.

　　According to estimates, the U.S. dollar index has risen by more than 11% this year, the euro, pound and yen have depreciated between 10% and 17% against the dollar, and the renminbi has depreciated by 5.8% against the dollar.

From the perspective of multilateral exchange rates, the RMB exchange rate index appreciated by 0.1%, indicating that the RMB remained basically stable against a basket of currencies.

From the perspective of exchange rate expectations, indicators related to foreign exchange forwards and options show that there is no obvious appreciation or depreciation of the RMB exchange rate, and market players generally maintain a rational and orderly trading model.

　　"Judging from the recent performance, although the U.S. dollar has strengthened further, with the stabilization and recovery of the domestic economy, the stability of the RMB exchange rate among the world's major currencies has become more prominent. Since July, the multilateral exchange rate has been stable and rising." Wang Chunying said that the RMB exchange rate The overall stability is relatively stable.

In the second half of the year, there will still be solid support for the RMB exchange rate to remain basically stable at a reasonable and balanced level.

　　On the one hand, China's economy has stabilized and recovered, major economic indicators have improved, and the industrial chain and supply chain have remained stable, which will continue to play a fundamental role in supporting the RMB exchange rate.

On the other hand, China's foreign trade and foreign investment are resilient, and funds from the real economy such as trade and investment will still be the basic inflow, which will help to balance the supply and demand in the foreign exchange market.

The exchange rate expectations of market players are basically stable, and the rational trading model of "purchasing foreign exchange on dips and settlement on highs" is maintained.

In addition, the structure of China's external assets and liabilities has been continuously optimized, and the scale of foreign exchange reserves has remained generally stable, still playing an important "stabilizer" and "ballast" role in stabilizing the country's economic and financial security.

　　Looking forward to the future, Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, believes that a strong US dollar will cause some disturbance to the RMB and non-US currencies, but it will not change the basic stability of the RMB. Basically balanced, the market has no reason to be unilaterally bearish on the RMB exchange rate.

"At present, under the support of factors such as the resilience of my country's foreign trade, the strong attractiveness of RMB assets, the two-way orderly flow of cross-border capital, and the significant increase in the flexibility of the RMB exchange rate, the RMB exchange rate is still expected to remain near the equilibrium level, and two-way fluctuations will be normalized. " Zhou Maohua said.

　　"From a practical point of view, exchange rate flexibility helps to release pressure in a timely manner to avoid expected accumulation, and play the role of a shock absorber for exchange rate fluctuations to absorb internal and external shocks." Guan Tao said that exchange rate flexibility has become a "spring" that can absorb internal and external shocks. External shocks; if the exchange rate is inflexible, shocks will be transmitted directly in.

The rigid exchange rate policy may not only constrain domestic monetary policy, but also affect the confidence of foreign exchange investors.

It is necessary to view the rise and fall of the exchange rate with an ordinary mind, do your own thing well, and let the exchange rate reflect the changes in economic fundamentals.

Yao Jin

Yao Jin