onshore and offshore RMB against the US dollar continued its rise last week, both recovering the 7.0 mark. As of 9:45 am on December 5, as of 10:05 Beijing time, the onshore RMB exchange rate was 6.9794, an increase of 756 basis points, and the offshore renminbi exchange rate was 6.9708, an increase of 453 basis points. This is the first time the RMB exchange rate against the US dollar has risen above 7.00 since September.
RMB mid-price was 7.0384 today, up 158 points. The mid-price of the previous trading day was 7.0542, and the onshore RMB closed at 7.0380 on the previous trading day.
The maximum rebound of the offshore RMB exchange rate exceeded 4,000 basis points
In mid-September this year, the RMB exchange rate continued to fluctuate and decline after falling below the 7.0 integer mark. Since November, the RMB exchange rate has fluctuated greatly, and the characteristics of two-way fluctuations have been significantly enhanced. At the end of October, both onshore and offshore RMB exchange rates fell below the 7.30 mark. The RMB mid-price was 7.2555 on November 4, setting a new low since January 22, 2008. Subsequently, the RMB exchange rate rebounded, and after November 15, there was a significant callback to . The RMB exchange rate rebounded strongly last week. As of 16:00 on December 2, the onshore market's RMB exchange rate against the US dollar hovered at 7.042, with the cumulative maximum increase of more than 1,800 basis points in the past week; the offshore RMB exchange rate against the US dollar hit 7.0359, with the cumulative maximum increase of more than 2,100 basis points.
compared with the low of above 7.30 in late October, as of today, the onshore RMB exchange rate has rebounded by about 3,500 basis points, and the maximum rebound of the offshore RMB exchange rate has exceeded 4,000 basis points.
At the same time, the dollar index fell significantly. Wind data showed that the November US dollar index had fallen from 111.56 points on November 1 to 104.7 on December 1, and the November US dollar index fell by more than 5%. Recently, in a public speech, the Federal Reserve Chairman of the Federal Reserve may slow down the pace of rate hikes in .
The low point of the RMB exchange rate may be confirmed
CITIC Securities Chief economist Mingming believes that the current low point of the RMB against the US dollar spot exchange rate may be confirmed, and the probability of the RMB exchange rate maintaining a wide fluctuation in the short term is relatively high. In the long run, the future RMB exchange rate valuation performance will gradually be dominated by the steady growth of the domestic economy fundamental .
Anxin Securities Chief economist Gao Shanwen recently stated that compared with the long-term reasonable level, he believes that the current RMB exchange rate is significantly undervalued. The factors that caused the depreciation of the RMB this year, such as the strengthening of the US dollar and the slowdown in domestic economic growth, may have significant weakening or improvement in the future. Therefore, Gao Shanwen expects that the RMB exchange rate will have a demand for recovery and swing to a reasonable level, and there is no suspense about the reverse breaking expectations in the future.
China's economic fundamentals are the largest support for the RMB exchange rate
BOC Securities Global Chief Economist Guan Tao believes that whether the RMB exchange rate rises or falls next year does not depend on the interest rate spread between China and the United States, nor does it depend on the strength of the US dollar, but on whether we can more efficiently coordinate epidemic prevention and control and economic and social development, make good use of the normal fiscal and monetary policy space, accelerate reform and opening up , and keep economic operation in a reasonable range. At the same time, the amount of autonomy in monetary policy next year depends largely on our tolerance for RMB exchange rate fluctuations.
Guan Tao emphasized that most countries have no way to rely solely on monetary policy to maintain stability against the US dollar, nor can they hope for the Fed's monetary policy shift after the recession of the US economy. The economic fundamentals of various countries are the core, and the structural tools of monetary policy and fiscal policy should be the focus of the next step.
Ping An Securities Chief Economist Zhong Zhengsheng said that if the epidemic situation next year is better than expected, compensatory consumption is higher than expected, and the policy of stabilizing growth remains consistent and consistent, then China's economic performance will achieve a smooth recovery and get better and better, which is the strongest support for the RMB.
Previously, the "China Monetary Policy Implementation Report for the Third Quarter of 2022" released by Central Bank also showed that in the next stage, the RMB exchange rate will continue to remain basically stable at a reasonable equilibrium level, with two major support factors: fundamentals and policy.
Pan Gongsheng, deputy governor of the Central Bank and director of the State Administration of Foreign Exchange, spoke at the 2022 Financial Street Forum Annual Meeting held recently, pointed out that the changes in the internal and external macro environment will help maintain the stable operation of China's foreign exchange market. On the one hand, the risk of economic recession in major developed countries has increased, inflation is still higher than the policy target, monetary policy will generally remain tightened, and the US dollar may still fluctuate at a high level at in the short term. Market institutions predict that the momentum of the US dollar's appreciation will weaken and the strong appreciation cycle may be nearing its end. On the other hand, the long-term positive fundamentals of China's economy will not change. Further optimize the "Twenty Articles" of epidemic prevention and control to improve the scientificity and accuracy of prevention and control, and will more efficiently coordinate epidemic prevention and control with economic and social development, and further release the momentum of China's economic growth.
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text/Beijing Youth Daily reporter Cheng Jie
edited by Fan Hongwei
