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The RMB Exchange Rate Against The US Dollar Has Even Reached A Record High Of &Nbsp; The Industry Has Called For Average Daily Volatility.

2011/5/30 16:29:00 56

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RMB versus US dollar in May 30th

exchange rate

The median price was 6.4856, continuing to rewrite a record high since the first day of trading.

On the 27 day, the central parity of RMB against the US dollar was quoted at 1 yuan against 6.4898 yuan, breaking through the 6.49 pass for the first time.

According to the international economic and exchange rate policy report released by the US Treasury on 27 July for the main trade partners, the RMB has appreciated 5.1% against the US dollar since June last year.

Under the general expectation that the renminbi will accelerate appreciation, the industry has renewed its call for increasing the daily average volatility of the RMB exchange rate.

Besides the spot market, the RMB exchange rate has even reached a record high. It is reported that the position of NDF (no principal delivery forward) in the overseas empty dollar / RMB has also increased in recent weeks.

Tengtai, vice president and chief economist of Minsheng securities, said in a speech at Fudan University on 28 July that the RMB exchange rate against the US dollar will rise to 6.13 at the end of this year, and the appreciation will exceed expectations.

Recently, domestic financial officials pointed out that "improving the RMB exchange rate formation mechanism, enhancing exchange rate flexibility and slowing import inflation pressure" also strengthened the market's expectation of RMB appreciation.

In fact, according to the international economic and exchange rate policy report, the major US trading partners, including China, did not manipulate the currency exchange rate to gain unfair trade advantage.

And restart since June last year.

RMB rate

Until the end of April this year, the RMB exchange rate against the US dollar has appreciated by 5.1%.

At nominal exchange rates, this appreciation is equivalent to about 6% of the adult rate.

If we take into account inflation, China's inflation rate is much higher than that of the United States, and the appreciation of RMB against the US dollar will be even greater, with an annual appreciation of about 9%.

At present, the volatility of the RMB against the US dollar is within the range of 0.5% of the middle price. Accompanied by the warming of the unilateral appreciation of the RMB, the call for increasing flexibility of the RMB exchange rate has also appeared again. Many people in the industry have expressed the expectation that the fluctuation range of the RMB exchange rate should be further expanded on different occasions.

Guan Tao, director of the balance of Payments Division of China's State Administration of foreign exchange, pointed out that the core of improving the exchange rate mechanism is to further increase the flexibility of RMB exchange rate and let the market play an increasingly important role in the formation of exchange rate.

The history of free floating in the foreign exchange swap market and the fact that the RMB has fluctuated with the US dollar and the floating of other major currencies such as the euro and yen shows that we need not be afraid of exchange rate fluctuations.

Floating is not equal to unilateral appreciation of RMB. Floating is conducive to forming bilateral fluctuations and restraining unilateral speculation.

If the exchange rate changes affect the real economy, the market will adjust its expectations and pactions.

The central bank can still regulate and control timely and according to the development of domestic and international situations, so as to prevent excessive fluctuation of exchange rate.

The adjustment of the balance of payments should take comprehensive measures such as finance, currency, trade, industry, investment and so on to prevent exchange rate overshoot (such as excessive appreciation) caused by the exchange rate reform.

Lu Zheng commissar, a senior economist at Xingye Bank, has pointed out that "foreign exchange reform" has entered the sixth year, and the exchange rate is at present.

RMB

The volatility of the US dollar is still in the very narrow range of 0.5%, which is still much smaller than that of many economies that were successfully exited from a fixed exchange rate to a floating exchange rate at the very beginning, allowing 1%.

This makes China's foreign exchange hedging market always "sterile", which further makes the number of foreign exchange dealers and foreign exchange pactions unable to be active.

However, Zhao Qingming, senior research fellow of China Construction Bank, told the economic reference Daily reporter that the call for increasing the volatility of daily average exchange rate has always existed. However, in addition to the daily fluctuation of RMB against the US dollar in the early days of the outbreak of the financial crisis in December 2008, it touched 0.5% of the border area. Under the same circumstances, the average daily range of 0.5% was endless.

It is not necessarily to expand the average daily volatility, but to promote the balance of international payments, alleviate the pressure of hot money inflow, and reduce the market's expectation of unilateral appreciation of the renminbi.