After two years, the RMB exchange rate returned to below 6.90.
29th morning, the onshore RMB against the US dollar spot exchange rate opened significantly lower, once falling more than 500 basis points during the session, and the lowest was 6.92 yuan; the offshore RMB exchange rate fell more than 300 basis points, and the lowest fell below 6.93 yuan, both of which set a new low in two years. During the same period, the index of in the international market hit a record high in the past 20 years, and non-USD currencies have adjusted one after another.
Industry insiders said that the increase in short-term fluctuations in the RMB exchange rate are a manifestation of the enhanced exchange rate elasticity and the improvement of marketization, which is conducive to timely and effectively releasing pressure and better playing the role of an automatic stabilizer. The decline in the RMB exchange rate will be beneficial to industry sectors with more export businesses such as textiles and clothing, home appliances, communications, and automobiles.
USD represents RMB exchange rate trend. Source: Wind
The RMB exchange rate fell below 6.90 yuan intraday
After two years, the RMB exchange rate returned to below 6.90 yuan.
Wind data shows that as of 11:00 on August 29, the spot exchange rate of the onshore RMB against the US dollar was 6.9200 yuan, the latest was 6.9145 yuan, down 524 basis points from the previous closing price; the spot exchange rate of the offshore RMB against the US dollar was 6.9318 yuan, the latest was 6.9248 yuan, down 293 basis points from the previous closing price.
The morning foreign exchange trading center announced that the mid-price of the RMB exchange rate against the US dollar on the 29th was 6.8698 yuan, a 212 basis points lower than the previous value. Since August 12, the RMB exchange rate mid-price has been lowered from the 6.73 yuan line. As of the 29th, the cumulative adjustment has been 1,374 basis points, with an amplitude of 2.04%.
RMB market exchange rate adjustment is greater. As of 11:00 on the 29th, the spot exchange rates of onshore and offshore RMB fell by 2.63% and 2.70% respectively from the closing prices on August 11.
In terms of range, this is the most obvious round of adjustment that the RMB exchange rate has experienced since the second half of the year. The background is that the dollar strengthens, while major non-dollar currencies such as the euro weaken sharply.
"At present, the global foreign exchange market is showing a strong US dollar and weak non-US dollar currencies. As a non-US currency, the RMB has also been affected to a certain extent." Zhao Qingming, deputy director of the China Foreign Exchange Investment Research Institute, said.
29 On the morning of the international market, the US dollar index continued to rise sharply, rising above 109.40 yuan for the first time since late September 2002. Non-USD currencies generally fell. As of 11:00 Beijing time on the 29th, the pound pound hit a low point since March 2020, with the intraday decline expanding to 0.52%, the euro fell to 0.9918 US dollars against the US dollar, and the increase of the US dollar against the Japanese yen expanded to 0.63%.
USD index trend. Source: WInd
RMB exchange rate is strong
From August 25 to 27, the Jackson Hall Global Central Bank Annual Meeting hosted by the Kansas City Fed in the United States was held. Federal Reserve Chairman Powell delivered a speech, reiterating the position of monetary policy to continue to tighten its anti-inflation. The hawkish stance beyond expectations triggered a sharp drop in the U.S. stock market and caused shocks in the global foreign exchange market.
Many institutional people believe that the US dollar will remain strong, which leads to continued pressure on non-US dollar currencies, especially some emerging market economies with relatively weak fundamentals.
Luo Zhiheng, chief economist and director of the research institute, predicts that the US dollar index may continue to rise, and the gap between the US and Europe economic cycles and currency cycles widens to support the US dollar's strength, exacerbating the pressure on depreciation of currencies in emerging markets.
Huatai Securities research team reminds that emerging market economies with more deterioration in trade conditions and greater fiscal and foreign debt pressure will be impacted by tightening of US dollar liquidity. These economies may face exchange rate depreciation, rising debt repayment pressure, and pressure on equity markets.
It is worth mentioning that compared with major non-US dollar currencies in the world, the RMB exchange rate against the US dollar has fallen slightly recently, and the stability of the RMB currency value is still relatively strong.
Guojin Securities chief economist Zhao Wei said that the short-term RMB exchange rate is under pressure. However, considering that the accounts of enterprises and residents have accumulated a large amount of unsettled foreign exchange funds before, coupled with the support of a high trade surplus, the RMB exchange rate will remain reasonably and orderly, and the pressure of depreciation is controllable.
Relevant person in charge of of the State Administration of Foreign Exchange said recently that my country's foreign exchange market has always shown strong resilience.The trade in goods showed a high surplus, the actual use of foreign capital maintained growth, and continued to play the role of stabilizing cross-border capital flows and the basic role of the foreign exchange market.
Moderate depreciation is good for the export sector
Institutional personnel believe that the reasonable and orderly adjustment of the RMB exchange rate will better match recent fundamental changes and will also help consolidate the resilience of foreign trade development.
Director of Zhixin Investment Research Institute Lianping said that the phased adjustment of the RMB exchange rate will have a certain positive boost to exports. This promotion is more reflected in the micro-enterprise level and helps improve the operating status of market entities.
CITIC Securities research report stated that the depreciation of the RMB exchange rate is logically beneficial to export companies mainly in foreign currency settlement. It is recommended to pay attention to three main investment lines: stocks with a high proportion of export business, stocks that benefit from domestic consumption upgrade + brand overseas dividends, and private brand overseas companies with better growth in the track.
Everbright Securities said that the depreciation of the RMB exchange rate against the US dollar is beneficial to the export sector, and petrochemicals, textiles and clothing, home appliances, communications, shipping and other sectors will benefit.
Edit: Yesong
