Chinanews.com, November 21. On the 21st, Pan Gongsheng, deputy governor of the People's Bank of China and director of the State Administration of Foreign Exchange, said at the 2022 Financial Street Forum Annual Meeting that since this year, affected by "high inflation" and "tight currency", the international The financial market, including the foreign exchange market, has experienced a year of severe volatility, and China's foreign exchange market has shown relatively good resilience.

Looking forward, China's foreign exchange market will maintain a stable operation.

　　In Pan Gongsheng's view, China's foreign exchange market has shown new characteristics and its resilience has continued to increase.

Compared with the previous two periods of U.S. dollar appreciation, the RMB exchange rate has become less sensitive to fluctuations in the U.S. dollar index since 2021.

From a global perspective, compared with major developed and emerging market currencies, the depreciation of the RMB is at an average level.

Although there were fluctuations in cross-border capital flows, they were generally stable and orderly.

　　Pan Gongsheng said that the strengthening of the resilience of the foreign exchange market is driven by various factors.

First, the RMB exchange rate fluctuates in both directions and has increased flexibility. The role of an automatic stabilizer in adjusting the balance of payments will be more pronounced, and external pressure can be released in a timely and effective manner.

Second, the basic balance of payments surplus played a leading role.

In the first three quarters of this year, my country's current account surplus was 310.4 billion U.S. dollars, the highest value in the same period in history, and the ratio of the size of the surplus to the gross domestic product (GDP) in the same period was 2.4%, which continued to be in a reasonable and balanced range; direct investment showed a net inflow, cross-border The flow of funds was stable and orderly.

The third is the overall optimization of the external debt structure. The increase in traditional financing-type external debt is small, and the type structure, currency structure, and maturity structure of external debt debt have been optimized.

Fourth, the proportion of RMB in the cross-border use of enterprises continues to increase, which will help reduce the risk of currency mismatch in cross-border transactions.

Fifth, the popularization of exchange rate hedging tools has significantly enhanced the adaptability of enterprises to exchange rate fluctuations.

　　"The hedging nature of RMB assets has become increasingly prominent." He pointed out that since the beginning of this year, the bond yields of major countries in the world have generally risen and prices have fallen, and RMB bonds have become one of the few financial assets with stable prices.

Unlike other emerging market bonds, RMB bonds are quasi-safe assets, and their risk-return characteristics are closer to those of bonds in developed countries.

China's macroeconomic policy is mainly based on China, and interest rate and exchange rate trends are relatively independent, which makes RMB bonds show a better diversification effect in global asset allocation.

　　Pan Gongsheng said that looking forward, China's foreign exchange market will maintain a stable operation.

On the one hand, the risk of economic recession in major developed countries is rising, inflation is still higher than the policy target, monetary policy will generally remain tight, and the US dollar may remain high and volatile in the short term. Market institutions predict that the momentum of US dollar appreciation will weaken, and the strong appreciation cycle may be coming to an end.

On the other hand, the long-term sound fundamentals of China's economy will not change.

Further optimize the "Twenty Measures" for epidemic prevention and control to improve the scientificity and precision of prevention and control, and coordinate epidemic prevention and control with economic and social development more efficiently; the implementation of a number of policies and measures to stabilize economic growth in the early stage will also further release China's economic growth kinetic energy.

In addition, the financial sector has issued a number of financial support policies to cooperate with the real estate market authorities and local governments to support rigid and improved housing needs, maintain stable and orderly real estate financing, increase financial support for guaranteed housing, and protect the legality of housing consumers. rights and interests, resolutely block and weaken risk spillovers, and stabilize market expectations and confidence.

The above-mentioned policies have played a good role in counter-cyclical adjustment and produced positive market effects.

We will adhere to the guidelines and policies of the central government on the development of the real estate market, adhere to the principles of marketization and the rule of law, combine long-term and near-term, and treat both symptoms and root causes, so as to promote the healthy and sustainable development of China's real estate market.

In the future, changes in the internal and external macro-environment will help maintain the sound operation of China's foreign exchange market.

(China New Finance and Economics)