The Central Bank Releases The RMB Stability Signal &Nbsp, And Emphasizes The Gradual Reform Of The Currency.

Yesterday, the first trading day after the US Treasury announced that the exchange rate report was postponed, the renminbi reversed slightly against the US dollar's middle price exchange rate.

The central parity of RMB against the US dollar was 6.6541, down 44 basis points from the previous trading day.

The so-called RMB intermediate price can be simply understood as the "official exchange rate" of the RMB against the US dollar.

Over the past two months, the renminbi has appreciated by nearly 3% against the US dollar.

There is widespread concern that the US Treasury has not put any further pressure on whether it will slow down the appreciation pressure of the renminbi.

Coincidentally, just yesterday, the people's Bank of China (

"Since the reopening of China's currency reform in June this year, the RMB exchange rate elasticity has increased. We will continue to push forward the reform of the RMB exchange rate in the direction of" market based supply and demand, reference to a basket of currencies, and a managed floating exchange rate system ".

But this process must be one.

"From the market perspective, we can maintain the basic stability of the RMB at a reasonable and balanced level."

Yi Gang said in particular.

Yi Gang did not specify what the "reasonable equilibrium level" should be.

However, according to this view, Yi Gang's stance may mean that the short-term appreciation of the RMB will come to an end.

But some market participants and research institutions still tend to continue to appreciate in the short term.

Central bank vice governor once again stressed gradual exchange reform

The central parity and spot price of the RMB against the US dollar ended yesterday.

Among them, the spot price of RMB reflecting market demand dropped by only 0.05%, or less than the central parity of RMB against the US dollar.

In the eyes of analysts, the weakening of the renminbi yesterday is understandable.

Due to the early morning of 18 hours in Beijing's peripheral market, the US dollar rebounded significantly for second consecutive days, which slowed down the pressure of RMB's continued rise to a certain extent.

But because of the above reasons, analysts generally agree that the renminbi is not going to be callback only on the basis of the trend of a trading day.

But the good news is that two central bank officials yesterday seemed to be cooling their expectations of appreciation.

The first is Yi Gang.

Speaking at a high-level seminar on "macro Prudential policy: Asia Perspective" organized by the International Monetary Fund (IMF) in Shanghai, he said that China would continue to push forward in the direction of market supply and demand and the reform of currency linked currencies, in order to increase the flexibility of RMB exchange rate in IMF.

He believed that since the reform of the RMB exchange rate formation mechanism was launched in June this year, the elasticity of RMB exchange rate has increased.

But Yi Gang also stressed that this process must be gradual. "From the current favorable balance in the gradual convergence, as well as foreign exchange supply and demand in the market, the RMB exchange rate reform is carried out on the premise of maintaining a basically stable level at a reasonable and balanced level."

Yi said in particular, "from the market perspective, we can maintain the basic stability of the RMB at a reasonable and balanced level."

Yi Gang also revealed that China will deliver three messages at the upcoming G20 conference in Korea on November.

Among them, the exchange rate is: "continue to reform the foreign exchange system in a gradual way, while maintaining the stability of the economy and keeping the RMB exchange rate at a relatively stable level, approaching the market based equilibrium".

Another central bank official, Xia Bin, a member of the central bank's monetary policy, said in a meeting in Shanghai that the long-term goal of the RMB exchange rate is still free floating.

But he also said that the managed floating exchange rate should still be managed at the moment, but the elasticity should be increased and the fluctuation range should be expanded.

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Agricultural Bank's strategic management department will continue to appreciate.

But market participants still tend to believe that the renminbi will appreciate in the short term.

Because the external pressure is still huge.

The latest research report published by the strategic management department of the Agricultural Bank yesterday bluntly pointed out that under the background of increasing exchange rate disputes, it is expected that China will choose to adopt a certain appreciation to calm down the grievances of all sides. In the short term, the appreciation of RMB will not be reduced, but will increase.

The report said that although the current exchange rate dispute is very noisy, and even the "currency war" or "exchange rate war" formulation, but there is still a very large room for maneuver, the major countries should be able to achieve a better solution to the exchange rate dispute through coordination and compromise, and should not break out the exchange rate war.

However, for the Renminbi that has become a target of public criticism, it also means that the pressure of RMB appreciation is enormous.

The report said that China will probably choose to adopt a certain appreciation to calm down the grievances of all sides.

"In fact, China also has the motive to take the initiative to raise its value. Whether it is structural adjustment or inflation prevention, it needs the cooperation of RMB appreciation.

But in the process of appreciation, we must coordinate the relevant policies, including increasing the elasticity of exchange rate, guarding against asset price bubbles, expanding domestic demand and adjusting the structure.

In the larger context, they should be the meaning of the 12th Five-Year plan.

The report says.

Of course, there are still different views on the short-term trend of RMB.

A trader in Beijing said.

"If the rebound of the US dollar index can last for a period of time, then the RMB to us dollar exchange rate can take the opportunity to enhance the characteristics of two-way fluctuations, so as to ease the market's strong appreciation of the renminbi."

To put it simply, the trend of the renminbi in the short term depends on the US dollar.

If the US dollar is strong, then the renminbi will be on the way back, or else it will continue to appreciate.

If RMB appreciation requires other regulatory measures to cooperate

It is worth mentioning that the bank's report also reminds us that if the RMB continues to appreciate, China's exchange rate will inevitably lead to hot money inflow and push up domestic asset prices because China adopts the three principles of "initiative, gradual and controllable" for the RMB exchange rate. Moreover, under the background of hard recovery of all countries, China's export enterprises will also face enormous pressure.

This report reminds us that since the beginning of September, the acceleration of RMB appreciation has triggered a series of problems, such as the inflow of hot money, the decrease in surplus and the rising of asset prices.

Because the real estate market is related to people's livelihood, and the recent hot money is flowing again, the necessity of regulation is further increased.

According to the latest data released by the bank for International Settlements, the real effective exchange rate index of the RMB in September has a benchmark value of 119.65 in the global exchange rate market. It has risen for third consecutive months, up 0.83% from August.