However, hidden crises still exist. For example, the offshore exchange rate of the U.S. dollar against the RMB that I mentioned has risen to 6.82. This is despite the intervention of the village.

A-share generally performed pretty well today. Despite the intensified turmoil in the external market, the three major indexes overall remained stable. However, hidden crises still exist. For example, the US dollar to RMB offshore exchange rate I mentioned has now risen to 6.82, and this is despite the intervention of the village. If had not intervened, it would probably have risen to above 6.9.

Although the rise of the RMB is beneficial to foreign trade to a certain extent, it is overall negative for us:

Firstly; the depreciation of the RMB means inflation, and importing companies will face greater cost pressure;

Secondly; The nature of capital is to seek benefits and avoid disadvantages. If the RMB depreciates too fast, it may lead to capital outflows, which is not conducive to the internationalization of the RMB;

Finally; many domestic companies have relatively large-scale short-term US dollar foreign debts . Those companies currently The cash flow of and is already in jeopardy. If the RMB continues to depreciate, it will increase their debt repayment costs. One of the reasons for the sharp decline of and in Hong Kong stocks today is the crisis of trust caused by some companies having no money to repay their debts. (The A-share sector also fell.)

Moreover, a very important reason for the current decline in foreign trade orders is that domestic ports are blocked and goods cannot go out. Therefore, even if the exchange rate falls now, the positive impact on foreign trade will be very limited. On the contrary, it may affect its overall profit margin in the short term.

As for other things that should be said, they are almost covered in the article at noon, so I won’t go into details here. You can click on the link to view it.