As the dollar index once again hit a 20-year high, the onshore exchange rate of the RMB against the US dollar and the offshore market both fell sharply. According to the official website of People's Bank of China , the National Foreign Exchange Market Self-Discipline Mechanism Television Conference emphasized that the two-way floating of exchange rate is the norm. Don't bet on the unilateral appreciation or depreciation of the RMB exchange rate. If you bet for a long time, you will lose.
On September 28, the foreign exchange risk reserve ratio of the forward foreign exchange sales business was officially put into effect on the rise from 0 to 20%.
However, due to the strong US dollar, the spot exchange rate of RMB against US dollar fell below the 7.2 mark during the session, with an intraday drop of more than 700 points, hitting a new low since 2008.
USD may continue to rise
On September 28, the US dollar index once rose to 114.79, with a cumulative increase of more than 19% this year.
Macro researcher of the Financial Markets Department of Everbright Bank said in an interview with the International Financial News that the US dollar rebounded strongly in the short term, setting a new high of more than 20 years. It did "shock" the market and triggered some investors to chase highs inertia, causing pressure from the RMB and other non-US currencies. Some non-US currencies fluctuate more than the RMB, which led to the RMB still maintaining strong strength against other non-US currencies baskets, such as the RMB's exchange rates against the euro, the Japanese yen, and the British pound.
This week, the CFETS RMB exchange rate index was 101.59, a slight decline from 102.09 last week, but it was almost the same as 102.14 at the beginning of the year, indicating that the RMB has basically remained stable against the currencies of its major trading partners, and its depreciation was mainly attributed to the strengthening of the US dollar index.
"So the recent trend of the RMB exchange rate is relatively complicated, and it is not objective to look at the performance of the RMB and US dollar currencies alone." Zhou Maohua pointed out.
China Securities said that the recent Fed continuous hikes has caused the US dollar index to soar, and non-US currencies generally depreciate significantly compared with the US dollar. The RMB exchange rate is relatively strong compared with other countries, and the depreciation of currencies in major developed countries such as the euro, pound and yen is even more exaggerated.
The British pound fell sharply last week after the British government announced its most aggressive tax cut since 1972, falling as much as 4.7% to $1.035 on the 26th. Analysis points out that the pound may fall below $1 in the next few days or weeks.
In addition, the euro fell further intensified after falling below parity.
Zhongtai Securities said that has not yet confirmed the end of the cycle due to the Fed rate hike, and the fundamentals of the European economy are relatively weak, and it is not ruled out that the US dollar index will continue to rise in the future. The differentiation of monetary policies between China and the United States has also deepened the inverted interest rate spread between China and the United States.
Invesco Asia Pacific (except Japan) global market strategist Zhao Yaoting also believes that the US dollar still has room for continued appreciation in the future. In an interview with the International Financial News, he said, "With the Federal Reserve's aggressive interest rate hikes and tightens monetary policy, the US dollar will further strengthen. Moreover, the market believes that the US economy is still good. Even when inflation is relatively high, the US dollar still has room for growth."
blockbuster meeting was held
According to the latest news on the official website of the People's Bank of China, on September 27, a video conference on the National Foreign Exchange Market Self-Discipline Mechanism was held. The meeting pointed out that since the beginning of this year, the RMB exchange rate has remained basically stable at a reasonable equilibrium level. The CFETS RMB exchange rate index is basically the same as at the end of 2021. The RMB exchange rate against the US dollar depreciated, but the depreciation was only half of the appreciation of the US dollar during the same period; the RMB appreciated significantly against the euro, pound and yen, and is one of the few strong currencies in the world at present. The
meeting emphasized that the foreign exchange market is of great importance and maintaining stability is the first priority. The RMB exchange rate remains basically stable and has a solid foundation. Compared with many economies facing the risk of stagflation, my country's economy continues to recover and develop in general, the price level is basically stable, and the trade surplus is expected to remain high. As the macro-policy effect appears, the basic economic situation will be more solid. The current RMB exchange rate formation mechanism is suitable for China's national conditions and can give full play to the role of the "two hands" of the market and the government. It has withstood the test of multiple rounds of external shocks in history. People's Bank of China has accumulated rich response experience and can effectively manage market expectations.The current foreign exchange market is generally standardized and orderly, but there are also a few companies following the trend of "exchange speculation" and financial institutions operating illegally. We should strengthen guidance and correction. must realize that the exchange rate point is inaccurate, and two-way fluctuation is the norm. Don’t bet on the unilateral appreciation or depreciation of the RMB exchange rate. If you bet for a long time, you will lose.
full text is as follows:
No need to panic excessively
Since this year, the onshore and offshore markets of the RMB exchange rate against the US dollar have both fallen by more than 13%.
According to whether various management tools directly affect exchange rate prices, China's exchange rate management tools are divided into four categories: First, the exchange rate pricing intervention tool, mainly including countercyclical adjustment factors and the use of foreign exchange reserve intervention; second, the foreign exchange liquidity adjustment tool, mainly including foreign exchange deposit reserves, foreign exchange risk reserves, currency swap trading, and the issuance of offshore central bills; third, cross-border capital flow management, including macro-prudential management , capital control, etc.; fourth, oral intervention.
In order to stabilize foreign exchange market expectations and strengthen macro-prudential management, the central bank of announced on September 5 and September 26, respectively, lowered the foreign exchange reserve ratio of financial institutions by two percentage points and raised the foreign exchange risk reserve ratio of forward foreign exchange sales business from 0 to 20%.
Zhao Yaoting said that for China Central Bank , cautious decisions need to be made to achieve balance. Because on the one hand, stimulus measures need to be introduced to stabilize growth, and on the other hand, it is necessary to prevent capital outflows to areas with higher yields due to excessive differentiation between monetary policy and the West. "So far, we believe that China's policy makers have done a very good job, and they are effectively avoiding further depreciation of the RMB, while implementing support policies to stabilize growth."
Zhao Yaoting believes that the divergence of Sino-US policies will continue in the future, but it will not deepen, because the central bank has sent out signals that there will be certain restrictions on interest rate cuts in the future. The most important thing at present is to stabilize the RMB exchange rate, so more stimulus policies may come from the fiscal side in the future, which may have a certain suppressive impact on the RMB's currency value, especially considering that the US dollar is very strong now.
Zhou Maohua said that from the perspective of domestic fundamentals, balance of payments, RMB exchange rate elasticity, and long-term allocation value of RMB assets, RMB does not have the basis for trend depreciation; the recent trends of the RMB and US dollar in China are deviating from fundamentals, and are mainly dominated by sentiment in the short term, and short-term fluctuations do not represent the trend.
"No need to panic excessively, financial market fluctuations are normal, and no market is always in a low volatility state; a country's exchange rate and capital market will eventually return to fundamentals. The domestic economy is steadily recovering, macro risks tend to converge, international balance of payments is basically balanced, and the RMB's stable foundation is solid. At the same time, assuming that the US dollar interest rate continues to strengthen significantly, the impact on US foreign trade and economic prospects will be lagging behind, which is also a 'disaster' for US stocks , real estate, etc.."
Zhou Maohua emphasized that despite changes in the overseas macro environment and severe market fluctuations, RMB will continue to operate in a reasonable range in the future, and two-way fluctuations will become normalized. At the same time, as the RMB gradually digests short-term risk factors, the domestic economy has steadily recovered, the international balance of payments is basically balanced, and the outlook for the RMB trend is optimistic.
reporter Li Xizi
editor Wang Zhexi
editor Sun Xiao
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-