#Toutiao Creation Challenge# The recent hikes and appreciation of the US dollar and the depreciation of the RMB have made the question of whether it should be exchanged for the US dollar or not, and some friends even questioned: Will anyone exchange RMB for US dollars and store i

First of all, under normal circumstances, are there anyone who exchanges RMB into US dollars and deposits it at home in cash? There may be, but it will be relatively small, especially the amount is relatively small

US dollars has once become one of the recommended financial management methods. Especially for those high-net-worth customers, customers who have expectations of studying abroad, traveling abroad, and investing abroad, allocating certain US dollar assets is also a reasonable choice.

But if you directly convert the RMB into US dollars and store it in your home, it may not be reasonable. I believe that there are not many such people. After all, it is not safe to store US dollars in cash at home, and it also leads to loss of deposit interest. If there were such people, there would definitely not be many.

Does it really convert RMB into US dollars to cash and store it at home? There will definitely be. But in general, it is a small amount of foreign currency, so you don’t need to consider it.

Secondly, is there anyone who really converts RMB into US dollars? There will definitely be .

There was a friend who exchanged his RMB deposits for nearly 800,000 US dollars, but not in cash and stored at home, but in foreign exchange and stored in the bank. What’s more interesting is that this friend’s US dollar does not handle fixed deposits or foreign exchange financial management, but is stored in the bank’s current deposit account, and loses deposit interest and financial income every year.

Therefore, there are not many people who exchange RMB for cash and store it in the family, and the amount of deposit is not large, but some people who exchange their RMB for US dollars or partially exchange their RMB for US dollars, but there are a large number of people who exchange their RMB for US dollars. Of course, there are many reasons. Perhaps the biggest reason is to fight against inflation and depreciation of funds.

Third, how do you view those who convert RMB into US dollars?

Although it is reasonable for some people, especially those who have foreign exchange needs in the future, it is reasonable to exchange a little US dollar appropriately, including those whose children need to study abroad, who have frequent needs in their own country, and those who may have foreign investment needs in the future, they should reasonably allocate certain foreign currency assets. But it should never be offset into foreign exchange cash, because foreign exchange cash cannot be paid directly to the outside world. Foreign exchange cash needs to be converted into foreign exchange before it can be transferred to the outside world. This must be taken seriously.

The idea of ​​those who think that they can convert the RMB into foreign exchange to resist inflation is actually not realistic and feasible, although some people may say that the RMB to the US dollar was around 1:6.3 in February 2022, and it had reached 1:7.12 on October 3, and the 8-month period depreciated against the US dollar by 13%. However, in the long run, although the exchange rate of RMB against foreign currencies has fluctuated and repeated, it still shows a stable trend overall. From the historical trend, the value of RMB against the US dollar is relatively stable. For example, from 1 US dollar to RMB 8.2796 in 1999, 1 US dollar to RMB 8.2770 in 2002, 1 US dollar to RMB 8.1013 in 2005, 1 US dollar to RMB 7.8087 in 2006, 1 US dollar to RMB 6.85 in 2008, and 1 US dollar to RMB 6.622 in 2010. Until 2021, 1 US dollar will be exchanged for RMB 6.3.

If we consider deposit income and financial management income, the RMB deposit interest rate is about 3%, and the financial management income is about 3%, while the US dollar deposit interest rate and financial management return rate are basically below 2%. Here we ignore the losses of RMB wealth management and foreign currency wealth management. Just from normal circumstances, the annual RMB deposit and financial management income is about 1 percentage point higher than the US dollar deposit interest rate and financial management income. Therefore, it is not cost-effective to convert RMB into US dollars to deposit it. (Qijian)