The Appreciation Rate Of RMB Has Gone Up Again. How Big Is The Future?

According to the latest data from China foreign exchange trading center, the central parity of RMB against the US dollar in August 4th was 6.7715, a slight increase of 7 basis points compared with the previous trading day, which once again hit a new high since the reform.

RMB's new high

On June, the US announced personal income in June.

He Weiwen, director of the Sino US trade and economic research center of China University of foreign trade, believes that the recent decline in the US dollar has led to an increase in the RMB against the US dollar.

Of course, looking at the Renminbi should be carried out under the overall framework of a basket of currencies, and the dollar is only one basket of currencies.

In fact, the recent rise in the value of the renminbi against the US dollar is much less than the depreciation of the renminbi against non US dollar currencies.

He Weiwen said, in fact, since the central bank announced the effective floating of the exchange rate in June 19th, the appreciation rate of RMB is not large.

"In July 15th, the bank for International Settlements released the main effective currency in June.

Central bank intensive analysis of foreign exchange reform

In a short period of half a month, the central bank has made 7 statements regarding the reform.

Since July 15th, Hu Xiaolian, vice governor of the central bank, has published 5 signature articles in a row. During the period, Yi Gang and Hu Xiaolian, director of the State Administration of foreign exchange, also interviewed the media about the issue of exchange reform.

These intensive topics of conversation include: floating exchange rate system is China's basic national policy; the ultimate goal of foreign exchange reform is to achieve RMB convertibility; exchange rate policy is in line with international balance of payments; flexible exchange rate system helps to enhance the effectiveness of monetary policy; the adjustment of production factor prices and exchange rate helps to balance the development of China's economy.

He Weiwen believes that the practice of regulators is mainly to make the world more understanding of China's exchange rate reform.

Fu Lichun, a doctor of economics at the Chinese Academy of Social Sciences, said that regulators could alleviate political pressure on the one hand and on the other hand show the determination of RMB exchange rate reform in China.

Focus on promoting capital account reform

On the 3 day, the State Administration of foreign exchange also said that the next stage will vigorously promote the reform of key areas of foreign exchange management, including maintaining a high pressure strike on "hot money", promoting capital account reform with emphasis and selectively, changing the formation mechanism of the RMB exchange rate and actively promoting the development of the foreign exchange market.

He Weiwen believes that capital account reform is conducive to preventing the impact of hot money on the RMB exchange rate.

In addition, it also creates conditions for the internationalization of RMB and the realization of convertibility.

Fu Lichun believes that the goal of capital account reform is the free convertibility of Renminbi under capital account, which is a gradual process. It is necessary to strictly control the exchange of hot money into Renminbi into the domestic market, while promoting the renminbi to be converted into foreign currency for external investment.

This is an important part of improving the foreign exchange market, and is also one of the bases for improving the "supply and demand" reform of the RMB exchange rate.