Reporter of the Economic Business: Zhao Jingzhi Editor of the Economic Business Business: Liao Dan
During the trading session on October 26, the US dollar index fell, and non-US currencies generally rose. On that day, as the US dollar index further weakened in the afternoon, the RMB rose by more than 1,000 points against the US dollar. As of press time, the exchange rate of has recovered to within 7.20. China Currency Network shows that the RMB mid-price against the US dollar was 7.1638, up 30 basis points from the previous day. As of press time, the onshore RMB exchange rate quotation against the US dollar rose to less than 7.18, up more than 1,300 points from the opening. But overall, the RMB exchange rate against the US dollar is still at a low level in the past decade.
Source: Wind, Chuangyuan Research, Jinshi Data Yang Jing’s chart, Visual China map
Judging from the three major RMB exchange rate indexes, the data is basically the same as at the beginning of this year, which shows that RMB exchange rate remains basically stable at a reasonable equilibrium level.
"It should be pointed out that the current focus of stabilizing the exchange rate is not to maintain a fixed point, but to keep the three major RMB exchange rate indexes basically stable and stabilize foreign exchange market expectations." Wang Qing, chief macro analyst of Oriental Jincheng , pointed out.
RMB exchange rate index is basically stable
From the overall perspective this year, the RMB and other non-US currencies are under depreciation pressure, such as the Japanese yen falling by more than 27% against the US dollar, the British pound falling by more than 14% against the US dollar, and the euro falling by nearly 12% against the US dollar this year. The depreciation pressure of currencies in various countries is mainly due to the impact of the strengthening of the external dollar.
Judging from the three major RMB exchange rate indexes, the data is basically the same as at the beginning of this year, which shows that the RMB exchange rate remains basically stable at a reasonable equilibrium level. The RMB exchange rate index of a basket of currencies can better reflect the comprehensive competitiveness of a country's goods and services than the bilateral exchange rate of a single currency, and can better reflect the changes in foreign exchange supply and demand caused by the real economy.
Specific data, at present, the CFETS RMB exchange rate index is 101.60, a decrease of 0.87 from the end of the previous year; the RMB exchange rate index (refer to the BIS currency basket) is 107.06, an increase of 0.4 from the end of the previous year; the RMB exchange rate index (refer to the SDR currency basket) is 98.36, a decrease of 1.98 from the end of the previous year.
However, since mid-last year, the US dollar has been in a super cycle, and the US dollar index has soared to a recent high of around 114 from its low of 90 in May 2021.
's impact on the US dollar, the central bank and the State Administration of Foreign Exchange took action a few days ago, deciding to raise the macro-prudential adjustment parameters of cross-border financing of enterprises and financial institutions from 1 to 1.25. People's Bank of China and The State Administration of Foreign Exchange last adjusted the macro-prudential adjustment parameters of full-scope cross-border financing on December 11, 2020. At that time, the RMB continued to appreciate, and the two departments lowered this parameter from 1.25 to 1.
"On the one hand, this move will help increase domestic US dollar liquidity, alleviate the pressure on RMB depreciation in the exchange rate market, and more importantly, it will further release the signal of stabilizing the exchange rate, help stabilize market confidence and avoid excessive gathering of expectations of RMB depreciation in the short term." Wang Qing said. Wen Bin, chief economist at Minsheng Bank, said that according to relevant regulations, the upper limit of cross-border financing risk weighted balance = capital or net assets × cross-border financing leverage ratio × macro-prudential adjustment parameters. This time, the increase of the macro-prudential adjustment parameters of cross-border financing of enterprises and financial institutions can increase the upper limit of cross-border financing risk weighted balance of enterprises and financial institutions, and encourage market entities to cross-border financing.
In addition, the Party Committee of the People's Bank of China and the Party Group of the State Administration of Foreign Exchange recently held an enlarged meeting, pointing out that at present, the potential growth rate of my country's economy remains at a high level, the factors and conditions for building a new development pattern are relatively sufficient, the recovery momentum of effective demand is becoming increasingly obvious, the price level is basically stable, the trade surplus is expected to remain high, and the RMB exchange rate remains basically stable has a solid foundation. The People's Bank of China and the State Administration of Foreign Exchange should continue to maintain a reasonable growth in the total monetary and credit, increase support for key areas such as technological innovation, rural revitalization, regional coordinated development, and green development, and stabilize the macroeconomic market. Deepen exchange rate marketization reform, enhance RMB exchange rate flexibility, and maintain basic stability of RMB exchange rate at a reasonable equilibrium level.
exchange rate policy tools are sufficient
It is reported that since the beginning of this year, the central bank has taken various measures to regulate the exchange rate, mainly: lowering the foreign exchange deposit reserve ratio, raising the foreign exchange risk reserve ratio, and raising the macro-prudential adjustment parameters of cross-border financing.
As on September 5, the central bank issued a message that in order to improve the ability of financial institutions to use foreign exchange funds, it was decided to lower the foreign exchange reserve ratio of financial institutions by 2 percentage points from September 15, 2022, that is, the foreign exchange reserve ratio is lowered from the current 8% to 6%.
htmlOn September 26, the central bank issued an announcement stating that in order to stabilize foreign exchange market expectations and strengthen macro-prudential management of , it decided to raise the foreign exchange risk reserve ratio of forward foreign exchange sales business from 0 to 20% from September 28, 2022.Wang Qing previously told reporters that the central bank had successively lowered the foreign exchange deposit reserve ratio, raised the foreign exchange risk reserve ratio, and recently released a policy signal for stabilizing the exchange rate through the foreign exchange market self-discipline mechanism meeting, all aimed at avoiding the excessive gathering of shorting expectations in the foreign exchange market, resulting in the formation of " herd effect ". If there is abnormal movement in the foreign exchange market in the later period and triggers large-scale capital outflows, the regulatory authorities may also take the following measures: First, lower the macro-prudential adjustment coefficient of enterprises' overseas loans and control capital outflows; Second, increase the macro-prudential adjustment parameters of cross-border financing of enterprises and financial institutions to expand capital inflows; Third, in a specific period, through the issuance of central bills and other measures, the liquidity of RMB in offshore market is tightened to a greater extent.
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