The RMB fluctuated against the U.S. dollar in January and the industry analyzed the full-year trend.

　　China News Service, Beijing, January 31 (Reporter Xia Bin) In January 2024, the exchange rate of RMB against the US dollar fluctuated and fell: As of 16:30 on January 31, Beijing time, the spot exchange rates of onshore and offshore RMB against the US dollar were respectively At 7.1792 and 7.1859, compared with the last trading day in 2023, they fell by more than 800 basis points and 600 basis points respectively. During the same period, the U.S. dollar index moved higher, climbing from 101.38 to above 103.

　　Overall, the RMB depreciated against the U.S. dollar in January, but in the last 10 trading days, the RMB exchange rate against the U.S. dollar has rebounded from the lows of the month, showing a correction.

　　Zhou Maohua, a macro researcher at the Financial Market Department of Everbright Bank, said that the recent RRR cut by the People's Bank of China is good news for the RMB exchange rate. The main reason is that the RRR cut has not changed the prudent tone of monetary policy. The fundamentals are solid and good for the exchange rate trend. The RRR cut will help boost the financial market. mood. In addition, the gradual shift to an interest rate cutting cycle in developed economies will also benefit the stability of the RMB exchange rate.

　　From a full-year perspective, what will be the trend of the RMB? Guan Tao, global chief economist of BOC Securities, proposed three scenarios. First, in the neutral scenario, if the Federal Reserve cuts interest rates slightly, the RMB exchange rate will show an oscillating trend of rising and falling.

　　Second, in the optimistic scenario, the U.S. economy continues to rebound, China's economic recovery is strengthening, and the RMB exchange rate may show a trend rebound.

　　Third, in the bad scenario, if the Chinese economy continues to face downward pressure, the U.S. economy does not experience a hard landing and still maintains normal exports, economic inflation remains at a high level, and the Federal Reserve does not raise interest rates or tighten again, then the RMB exchange rate will continue to face challenges. depreciation pressure.

　　Lian Ping, chairman of the China Chief Economists Forum, believes that in 2024, relative changes between China and the United States in aspects such as monetary policy, growth path, price level, and international balance of payments will further promote the weakening of the U.S. dollar and the strengthening of the RMB.

　　He predicts that the central parity rate of the RMB exchange rate is likely to fluctuate in both directions within the range of 6.8 to 7.1 in the first half of 2024, be basically stable, and be stable and rise. In the second half of 2024, as the Fed's interest rate cut process is established and China's economy further stabilizes and improves, the RMB will maintain an appreciation trend on the basis of overall stability, and the exchange rate range may move further upward before the end of the year.

　　The chief economist of CITIC Securities clearly predicts that as policies help the domestic economy stabilize and rebound, direct investment and securities investment may recover, and domestic fundamentals may gradually become more supportive of the exchange rate. At the same time, the Fed's first interest rate cut may be after the middle of this year, and external pressure on the RMB is expected to gradually ease. Throughout the year, the RMB exchange rate against the US dollar may fluctuate widely within the range of 6.9 to 7.3.

　　Pan Gongsheng, governor of the People's Bank of China, said that the short-term impact of the exchange rate is diverse, such as economic growth, monetary policy, financial markets, geopolitics, risk events, etc. The medium- and long-term trends fundamentally depend on economic fundamentals. "So we judge that the RMB exchange rate will continue to remain basically stable at a reasonable equilibrium level in 2024."

　　Pan Gongsheng gave four reasons for the above judgment. First, the domestic economy is operating steadily. Second, there have been some changes in the external international financial environment. The misalignment between the monetary policy cycles of China and the United States is expected to be improved, which will promote the convergence of interest rate differentials between China and the United States and help the RMB exchange rate and cross-border capital flows become more stable and balanced. Third, RMB assets have good investment and hedging value. Fourth, the micro-foundation for exchange rate stability has become more solid, the foreign exchange market has become more resilient, and the participants have become more mature. (over)