The tuition fees for studying in the United States in the fall "increased" by thousands of yuan, what happened?

　　China News Service, August 27th (Zhongxin Finance and Economics Gong Hongyu) "Tuition fees have risen again." With the arrival of the autumn semester, American international students found that the tuition fees settled in RMB became more expensive when exchanging foreign currency.

　　Yifei (pseudonym), who is studying in California, USA, introduced to Zhongxin Finance that taking the tuition fee of US$10,000 as an example, the current exchange rate needs to be paid about 5,000 yuan more than the spring semester.

　　On August 25, data from the China Foreign Exchange Trading Center showed that the central parity rate of the RMB against the US dollar was 6.8536, a depreciation of 148 basis points.

On the 23rd, the exchange rate of the onshore RMB against the US dollar hit 6.8666, a new low of nearly two years, and there is a big gap from the high value of 6.3 in early March this year.

Data map: RMB.

Photo by Gong Hongyu

Why does the RMB keep falling against the US dollar?

　　Experts pointed out that this round of RMB depreciation is affected by both internal and external factors.

　　"From the perspective of external factors, multiple rounds of interest rate hikes by the Federal Reserve in 2022 have been implemented, and the market expects that the Federal Reserve will continue to raise interest rates in September, driving the US dollar index to strengthen." Wang Youxin, a senior researcher at the Bank of China Research Institute, said in an interview with Zhongxin Finance.

　　On August 26, the U.S. dollar index was at 108.52, an increase of about 9.5 or 9.6% compared with March when the Federal Reserve raised interest rates for the first time this year.

Fed funds futures traders are pricing in a 61% chance of a 75 basis point hike by the Fed in September and a 39% chance of a 50 basis point hike.

　　In addition, Wang Youxin mentioned that due to the different cycles of the Sino-US economy and the loose monetary policy implemented by the Central Bank of China, both the medium-term lending facility and the loan market quoted interest rates were lowered in August.

In this context, the inversion of interest rates between China and the United States continued to deepen, and the RMB was further under pressure.

　　"The change in the RMB exchange rate also reflects changes in my country's macroeconomic fundamentals." Wang Youxin said that the increase in my country's social financing scale and new RMB loans in July were lower than expected, showing that effective demand has not been fully restored, and the current epidemic situation in some cities is also repeated. hinder the recovery of consumption.

　　What is the impact of RMB depreciation on imports and exports?

Wang Youxin believes that, on the one hand, the fall of the RMB exchange rate will help export companies to enhance their price competitiveness and consolidate their export competitiveness; on the other hand, it will also increase import costs and squeeze the profit margins of import companies.

Data map: US dollars.

Photo by Liu Yanghe of China-Singapore Finance and Economics

Will the RMB exchange rate continue to fall?

　　"As China's economic performance stabilizes in the third quarter, the trend of RMB depreciation will also slow down." Han Fuling, a special expert from the People's Bank of China, pointed out to Zhongxin Finance.

　　Wang Youxin also said that the RMB may continue to be under pressure and fluctuate in the third quarter, but the fluctuation range will be lower than that in the second quarter.

As far as the fourth quarter is concerned, as China's policies increase, the economic trend will be more obvious.

　　China's official data shows that since July, a package of economic stabilization policies and measures has continued to play a role. In July, the main production and demand indicators were basically stable, the industrial added value above designated size, the service industry production index, imports and exports, total retail sales of consumer goods, and fixed asset investment. kept growing.

The urban surveyed unemployment rate continued to fall.

　　At the same time, the European and American economies are likely to fall into recession in the fourth quarter.

On August 23, local time, the White House lowered its forecast for the U.S. economy, dropping its forecast for real U.S. GDP growth in 2022 to 1.4% from 3.8% in March.

　　Wang Youxin also mentioned that the market expects that the Fed may return to the rhythm of 25 basis points of interest rate hikes in the fourth quarter, or even end this round of interest rate hikes, which may lead the US dollar index to fall from its highs.

　　"Affected by changes in economic fundamentals, around October should be an inflection point, and the RMB may return to a stable and positive trend." Wang Youxin said.

(Finish)