China News Service, December 6th (Zhongxin Finance and Economics Gong Hongyu) After a cumulative increase of 1,300 basis points in November and a touch around 7 on December 2, on the 5th, the exchange rate of the RMB against the US dollar finally "lived up to expectations" and rose above the "7" pass.

　　As of 18:00 on the 5th, both the onshore and offshore renminbi-dollar exchange rates rose above 6.95.

This is also the first time since late September that the RMB exchange rate has rebounded to the "6" range.

　　In addition, the central parity rate of the RMB against the US dollar has also been raised.

According to data released by the China Foreign Exchange Trading Center, the central parity rate of RMB against the US dollar was reported at 7.0384 on December 5, an increase of 158 basis points from the previous trading day.

Onshore RMB exchange rate trend.

Why did the RMB exchange rate rebound rapidly?

　　"The U.S. dollar has officially ushered in an inflection point. After gradually losing the support of tightening monetary policy, it will further pull back under the impact of recessionary transactions." Wang Youxin, a senior researcher at the Bank of China Research Institute, said in an interview with China New Finance and Economics that the recent sharp rebound in the RMB exchange rate is due to external factors. It appears to be due to a change in Fed tightening expectations.

　　On November 30 local time, considering factors such as the lag in the effect of monetary policy, Federal Reserve Chairman Powell hinted in his speech that the Fed may slow down the possibility of raising interest rates next.

　　The Nanhua Futures Research Report mentioned that due to the renewed market expectations for the Fed’s monetary policy shift, the U.S. dollar index has fluctuated and declined recently, and its overall performance is weak. It has fallen below 105 last week.

　　From the perspective of internal factors, Wen Bin, chief economist of Minsheng Bank, said that with the optimization of epidemic prevention and control measures in many places across the country, market sentiment at home and abroad has increased significantly, and the prospects for domestic economic recovery have become more optimistic.

　　"Under the influence of the significant drop in the U.S. dollar index, the multi-dimensional increase in domestic favorable policies, and the obvious trend of optimization of epidemic prevention measures, the market's confidence in my country's economic recovery has greatly improved." Nanhua Futures Research Report also mentioned.

　　In addition, Wen Bin said that since the central bank is currently focusing on economic growth, the current monetary policy is relatively loose. On December 5, the central bank officially implemented a 0.25 percentage point RRR cut, releasing long-term funds totaling about 500 billion, which will help maintain liquidity Reasonable and sufficient and the implementation of a package of policy measures to stabilize the economy will benefit the recovery of the domestic economy.

What are the characteristics of RMB exchange rate fluctuations this year?

　　Wen Bin pointed out that since the beginning of this year, due to the sharp rise of the U.S. dollar index and repeated domestic epidemics, the RMB exchange rate has fluctuated sharply.

　　"

However, as the pace of external interest rate hikes by the Federal Reserve slows down, and positive progress has been made in internally coordinating epidemic prevention and control and economic and social development, the volatility of the RMB in the market outlook is expected to moderate

." Wen Bin said.

　　At the annual meeting of the 2022 Financial Street Forum previously held, Yi Gang, governor of the People's Bank of China, also mentioned that the RMB has depreciated against the US dollar this year, but the depreciation rate is smaller than that of other major currencies, maintaining the basic stability of the RMB's currency value and purchasing power. .

What is the impact of the rebound of the RMB exchange rate?

　　Wang Qing from the Research and Development Department of Dongfang Jincheng pointed out that the sharp rebound of the RMB exchange rate will, on the one hand, ease the pressure of capital outflows in the domestic capital market, reduce the cost of imports for enterprises, and reduce the price of RMB for individuals to purchase overseas commodities; on the other hand, this will also It will reduce the exchange income of export enterprises and reduce the cost of personal foreign exchange purchases.

　　Wen Bin mentioned that as of the close on December 5, the Shanghai Composite Index rose by 1.76%,

showing an obvious situation of both stocks and exchanges rising

.

The Cinda Futures report pointed out that the optimization of epidemic prevention policies in many places and the sharp rise in the RMB exchange rate have gradually digested the negative factors, and the upward trend of the index in the medium term remains unchanged.

　　In the foreign exchange market, Cinda Futures reported that although the Fed’s interest rate hike path has wavered again, the offshore RMB exchange rate has maintained an appreciation trend for several consecutive trading days and successfully broke through the 7 mark, which is positive for the flow of funds in the equity market.

Data map: RMB.

Photo by Gong Hongyu

How will the RMB exchange rate go next?

　　In Wang Youxin's view, as the epidemic prevention and control policies become more scientific and precise, it is expected that the impact of the epidemic on the economy and society will gradually weaken, production, investment and consumption activities will gradually become normalized, and economic recovery will enter the fast lane , which will significantly improve market expectations and promote a further rebound in the RMB exchange rate.

　　"Especially from the end of this year to the first half of next year, the risk of economic recession in developed economies such as Europe and the United States is increasing. The Chinese economy and RMB assets will become a safe haven for global wealth, and cross-border capital flows will gradually improve. Currently Bank of America, JPMorgan Chase, Goldman Sachs Wall Street institutions and other institutions have raised their expectations for the return rate of China's stock-related indexes next year, and they are all singing more RMB assets. It

is expected that the RMB exchange rate will continue to maintain an upward trend at least in the middle of next year.

" Wang Youxin said.

　　The Industrial Research Report pointed out that capital is returning to the stock market, and the RMB is expected to continue its appreciation correction since November in December.

In October, the purchase rate exceeded the settlement rate, but under the rigid demand for foreign exchange settlement before the Spring Festival, the RMB will regain its strength at the end of the year and the beginning of the year.

　　Wen Bin mentioned that looking forward to 2023, when the signs of global economic recession are becoming more and more obvious, the U.S. dollar index may still fluctuate significantly. At the same time, the continued decline in overseas demand will also suppress my country's exports. When the stability is improving and the inflation pressure is significantly lower than that of European and American countries, the RMB will most likely maintain a relatively stable two-way fluctuation pattern.

(Finish)