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The RMB Exchange Rate Dropped &Nbsp, Showing Signs Of Approaching Equilibrium Level.

2012/3/14 17:37:00 10

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Facing the February trade

Deficit

A record high of nearly 31 billion 500 million yuan, the RMB against the U.S. dollar yesterday fell sharply, the middle price fell 209 basis points, the biggest one-day decline in 1 and a half years, and the spot exchange rate also fell sharply by 158 basis points.

Market analysis pointed out that the recent RMB exchange rate elasticity continued to increase. The reason for yesterday's decline was mainly due to the huge trade deficit and the recent strength of the US dollar.

Jiang Shu, an analyst with the capital operation center of Xingye Bank, told reporters that the increase in trade deficit will affect the psychological expectation of the market for the whole year's trade and slow down the expected appreciation of the renminbi.

Besides,

International dollar close

A stronger period is another reason.

The non farm payroll data released by the US over the weekend were better than expected, weakening the expectations of the QE3 launch, stimulating the US dollar to rise sharply overnight, and weakening the risk currencies.

It also made the middle price of the renminbi against the dollar plunged on the first trading day of the week.

Yi Gang, vice president of the central bank and director of the State Administration of foreign exchange, pointed out yesterday that China's trade deficit came from 1 to February this year.

As to whether this deficit means that the exchange rate of the renminbi has reached a near equilibrium level, he thought, "at least this is a very positive sign".

It is worth mentioning that although the central parity of the RMB against the US dollar has dropped sharply yesterday, other currencies of the renminbi have risen sharply on the same day, and the renminbi exchange rate is generally flat on the whole.

Among them, the yuan rose 343 basis points against the yen yesterday, and the yuan rose 622 basis points and 694 basis points respectively against the pound and the euro.

Meanwhile, the elasticity of RMB exchange rate since March has also increased.

According to the latest data from China foreign exchange trading center, the central parity of RMB against the US dollar was reported at 3.3282 on the 12 day, down 209 basis points from the previous trading day.

Just last week, the central parity of the RMB against the US dollar fell 4 consecutive trading days, down 255 basis points.

Yi Gang said that since the fourth quarter of last year, there has been a relatively continuous two-way expectations and two-way fluctuations in the RMB exchange rate.

It is a new phenomenon that the expected two-way volatility continues for a long time and the scope of floating is relatively flexible. This phenomenon has been going on for the first two months of this year.

For the future trend of RMB exchange rate,

Market analysts

Analysis shows that the overall appreciation of RMB will slow down compared with last year.

Liu Dongliang, a financial analyst at the China Merchants Bank, pointed out that the foreign trade situation in the first half of the year may not be very optimistic, and that it will be better in the second half of the year. But overall, the probability that the trade surplus will shrink sharply this year is very large.