The Narrowing Of The RMB Dollar Spreads Attract Shoe Companies To Hoard The Dollar

In the evening of July 5th, the Central Bank of China decided to cut interest rates again, the second time in a month.

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The most direct impact on the exchange rate market is the narrowing of the interest rate differential between the RMB and the US dollar, which is also pushing the US dollar to be held.

Now, the biggest private shoe making enterprise in China.

The Limited by Share Ltd (hereinafter referred to as AOKANG) is more willing to retain the US dollar within the "permitted range" after receiving the US dollar payment from overseas buyers, instead of selling it to the bank on the same day as almost the same day that it received the US dollar in exchange for the renminbi being appreciated at that time.

"We can stay as far as possible, and we even hope that all of them will not be settled."

Li Haijun, head of export management of AOKANG International (603001), said.

In fact, since the beginning of May, the rise of the US dollar index has been more obvious.

Just in the second quarter of 2012, the yuan depreciated to 0.48% against the US dollar.

Shen Jianguang, chief economist of Mizuho Securities Greater China, believes that the central bank's interest rate cut shows that the economy has fallen or exceeded expectations.

In fact, many import and export trade enterprises in China also see the impact of economic slowdown on exchange rate.

Enterprises began to increase the retention of US dollars, which reduced the US dollar into RMB into the real economy.

Since 2012, the RMB exchange rate has been characterized by two way floating, and people's expectations have begun to split up.

At the end of 3, the central parity rate of RMB against the US dollar was 6.2943, only 66 basis points higher than the end of last year, and the appreciation rate was 0.1%.

In the first quarter, the RMB exchange rate against the US dollar increased in the 58 trading days, the 29 trading days, and the 29 trading days depreciated.

The two quarter has become the biggest decline in the RMB exchange rate since 2005 when the yuan was decoupled from the US dollar.

Dongguan Phnom Penh Metal Industry Co., Ltd. also adopted the same strategy as AOKANG.

Liu Dabang, managing director of the company, said: "recently, we have adopted a" no move "approach, depending on daily expenses to decide how many dollars will be exchanged for RMB.

More than just hoarding the dollar, some companies are buying more dollars to liquidate their "dollar shorts" in the past few years.

When the renminbi appreciates strongly, China is paying in US dollars.

It tends to borrow from banks rather than buying dollars.

In this way, we can earn a higher interest rate on RMB deposits and benefit from the appreciation of the RMB against the US dollar.

Now, fewer and fewer companies are borrowing dollars from banks.

At the end of 3, the balance of foreign currency loans of financial institutions was $559 billion 500 million, an increase of 17.2% over the previous year, an increase of 21 billion 100 million US dollars compared with the beginning of the year, and a decrease of 5 billion 900 million US dollars compared with the same period last year.

The choice of Chinese financial personnel and the foreign exchange position of Chinese banks are quietly affecting the central bank's monetary policy.

At a news conference in March this year, Zhou Xiaochuan, the governor of the central bank, said that lowering the reserve requirement ratio was a counteract to the effect of the US dollar hoarding.

He also pointed out that any adjustment of the deposit reserve ratio will depend on the foreign exchange position of banks and how the balance of payments affects market liquidity.