RMB's New High &Nbsp; Offshore Long-Term Trend Is Becoming Cold.

Since the central bank announced the reform in July 21, 2005, the RMB exchange rate reform has been going on for 6 years. Yesterday, the central parity, closing price and intraday price of the RMB against the US dollar have all set a new high since the exchange rate reform. After the RMB exchange rate rose 6.46 on Wednesday, it closed to the 6.45 pass.

Although the call for appreciation of the renminbi has been rising in the domestic market, the reporter found that the offshore renminbi market has been "upside down" in the recent rise in RMB and RMB exchange rate.

RMB exchange rate Intraday close to 6.45

According to the data released by the foreign exchange trading center, the central parity of RMB against the US dollar was 6.4536 yesterday, up 56 basis points from the previous day's middle price, and has reached a new high for two consecutive days. Yesterday's closing price and the highest intraday price were 6.4516 and 6.4505 respectively yesterday, all of which are high.

The International Monetary Fund yesterday (July 21st) issued a report urging China to let the renminbi appreciate, saying that considering the medium-term fundamentals, the RMB exchange rate is still "seriously underestimated", and according to different calculation methods, the renminbi is undervalued by 3% to 23% against a basket of currencies.

Chinese authorities refute the contents of the report, saying that IMF's assessment mechanism does not accurately reflect China's current exchange rate level, and that the global financial crisis has slowed down the pace of China's economic growth mode transformation.

Domestic and foreign markets diverge

Although the domestic market has a higher voice for the appreciation of the renminbi, the offshore market is also more recent than the US dollar. exchange rate of RMB The rise is "upside down".

From the overseas non deliverable market data reflecting the expected appreciation of the renminbi, the US dollar NDF quotation for one yuan in the past 3 months has risen gradually from 6.30 at the end of April, and has been hovering around 6.39 since the end of May, indicating that the overseas market's expectation of RMB appreciation is tending to be calm.

Bloomberg terminal statistics show that from November 2010, the difference between the US dollar exchange rate and the offshore 6 month NDF in the spot market began to widen. In April 2011, the appreciation rate of RMB rose to 2% after half a year. Starting in May this year, the gap between the two prices narrowed and the increase was expected to fall to around 0.6%.

In response, Liu Ligang, director of economic research at the Greater China region of Australia and New Zealand Bank, believes that the arbitrage trading between CNH and NDF has been rising. It also limits the downward space of NDF. In the medium term, NDF still has a larger downside.

Mitu, a foreign exchange strategy analyst at Orient Bank of France, said that when the funds in China were still betting on the appreciation of the renminbi, the price change in the offshore non deliverable market was slow, indicating that the renminbi's growth would slow down, at least not as obvious as in the first half of this year.

Appreciation of Hongkong's renminbi or surplus

Under the expectation of RMB appreciation, many overseas residents acquire Renminbi and Hongkong appreciates RMB appreciation.

Statistics show that since the launching of cross-border trade settlement pilot, the use of RMB has been developing rapidly in Hong Kong. deposit Scale has seen blowout growth. In the second half of 2010, RMB deposits in Hongkong increased by 250%, reaching 315 billion yuan at the end of 2010.

According to market analysts, the total amount of RMB in Hongkong will increase by 300% to 10000 billion yuan in 2011.

Wang Qing, chief economist of Morgan Stanley Greater China, believes that in the long run, the internationalization of a country's currency can not be based on speculative demand arising from appreciation expectations. Under the strong expectation of RMB appreciation, although the policy of encouraging capital outflow is likely to fail to achieve the desired effect, it should still be unremittingly promoted.