China-Singapore Jingwei Client, March 27th. According to the China Foreign Exchange Trading Center, on the 27th, the central parity of the RMB against the US dollar rose by 265 basis points to 7.0427 yuan, rising for three consecutive days.

Source: China Foreign Exchange Trading Center

On March 25, the central parity of the RMB against the US dollar rose from depreciation, and increased by 257 basis points that day. Since the 25th, the central parity of the RMB against the US dollar has risen for three consecutive times, and the cumulative increase over the three days is 572 basis points. This week, the central parity of the yuan against the US dollar was raised by 625 basis points.

According to Wind data, the median price of RMB against the US dollar was reported at 7.0692 on the previous trading day, closing price at 7.030 at 16:30, and closing at 7.0700 at 23:30 at night. On the 26th, onshore RMB against the USD closed at 7.030 yuan at 23:30 Beijing time, Last trading day and night closed up 450 basis points. The offshore RMB closed at 7.0811 yuan against the US dollar on the 26th, an increase of 475 basis points from the closing price of the previous trading day.

In addition, the US dollar index fell sharply on the 26th. The US dollar index, which measures the US dollar against six major currencies, fell 1.67% on the day and closed at 99.3761 in the late market.

On the 27th, the central bank announced that the current total liquidity of the banking system was at a reasonable and sufficient level, and no reverse repurchase operation was carried out on March 27, 2020. Wind data shows that today's non-reverse repurchase expires, and this week the central bank's open market neither invested nor withdrawn. As of the 27th, the central bank has suspended reverse repurchase operations for 29 consecutive business days.

Guan Tao, global chief economist at BOC Securities, said that China ’s monetary policy would have to be formulated and implemented in accordance with the situation of its own country. The increased marketization of the RMB exchange rate has given the central bank greater confidence and more room for monetary policy. At the beginning of this year, the People's Bank of China lowered its quota, and since early February, monetary policy has become more flexible and appropriately responded to the impact of the epidemic. None of this has had a major impact on the RMB exchange rate.

Guan Tao pointed out that the People's Bank of China also has structural monetary policy tools such as interest rates, deposit reserve ratios, reloans, rediscounts, and MLF, PSL, and SLF. It can even study and create new monetary policy tools. If necessary, the People's Bank of China is fully confident and capable of using a package of monetary policy tools to maintain a reasonable and adequate liquidity in the market and to maintain a basically stable RMB exchange rate at a reasonable and balanced level.

At a press conference on March 22, the State Council ’s Deputy Governor Chen Yulu said: "In the long run, the trend of the RMB exchange rate depends on the stability of economic fundamentals. With the domestic epidemic prevention and control situation Continue to improve, as well as the continued recovery of domestic labor and productivity, the long-term improvement of the Chinese economy will form a strong support in the face of the stability of the RMB exchange rate. At the same time, we see that in the financial market, the local and foreign currency spreads remain Being in a suitable range, coupled with China's sufficient and stable foreign exchange reserves, all of these have provided strong support for the continued stability of the RMB exchange rate. "

Chen Yulu pointed out that the exchange rate of RMB against the US dollar is expected to fluctuate around 7 yuan in the future, with depreciation and appreciation, and will continue to float in both directions. The foreign exchange market is operating smoothly, and expectations of exchange rates are also stable. (Zhongxin Jingwei APP)