If The RMB Enters A Devaluation Channel, The Textile Industry That Will Export To The US Will Benefit.

Since the beginning of this week, the RMB exchange rate has fallen for three consecutive days, with a total decline of 317 basis points. On the 25 day, the central parity of RMB against the US dollar was reported at 6.3429, which not only set a new low this year, but also the lowest point since last December 15th.

So far this year, the central parity of RMB against the US dollar has fallen by 0.67%.

Market participants pointed out that the RMB did not show a trend of devaluation. The drop was only due to the recent strength of the US dollar. In the course of the reform, the increase of RMB exchange rate elasticity is inevitable. The market should eliminate the fear of volatility so as to adapt to the future fluctuations.

Stronger dollar drives lower middle price

"The current bilateral fluctuations are normal and do not represent a trend change in the future RMB exchange rate."

25, the chief economist of the Industrial Bank, Lu political commissar, said in an interview with reporters that the recent "three consecutive Yin" of the renminbi was mainly influenced by the strength of the US dollar.

In fact, compared with the other emerging market currencies in the past year

Compared with the two digit figure, the depreciation rate of RMB this year is still relatively small.

Looking back to the trend of RMB exchange rate against the US dollar so far this year, it is still fluctuating in the range of 6.30 to 6.34.

According to the middle price yesterday, the RMB has not appreciated against the US dollar since the beginning of this year, but there has been a slight depreciation. The depreciation rate is 0.67%.

As of press release yesterday, the dollar index yesterday hit the highest level to more than 84 points, hitting a 2 year high.

Stimulated by the strong US dollar index, on the 25 day, the RMB against the US dollar fell 69 basis points on the previous trading day, and continued to drop 90 basis points.

What is worth mentioning is that although the central price has gone down sharply, the spot rate of exchange has opened up. However, according to traders, many large commercial banks yesterday sold the US dollar collectively, which inhibited the decline in the spot exchange rate of RMB, and the spot exchange rate closed at 6.3885 yesterday, only 27 basis points lower than the previous day.

Since the reform in 2005, the appreciation of RMB has reached nearly 30%.

Despite the recent downward trend, many people in the industry do not see that there is a foundation for a significant depreciation of the RMB. In the course of the reform, the RMB exchange rate flexibility will further increase.

Lu Qianjin, an associate professor of finance at Fudan University, believes that, at first, the current 3 billion foreign exchange reserve is an important factor in stabilizing the foreign exchange market.

Second, the fundamentals of China's economy remain stable, and the emphasis is on structural adjustment and domestic demand.

More importantly, the depreciation of the renminbi can not stimulate exports substantially.

And the depreciation of the renminbi caused by the European sovereign debt crisis is difficult to play a big role.

In addition, the recent RMB spot exchange rate volatility has also increased. On Friday, the spot exchange rate closed down 1% compared with the first half of the middle price, and Monday's decline still reached 0.94%, causing widespread concern in the market.

"The success of the reform is not to see the magnitude of the appreciation of the renminbi, but the ability of the renminbi to resist the impact of the international economic change and to reduce the" floating fear "of the domestic exchange rate.

Lu commissar believes that the current market to the RMB spot exchange rate hit the upper and lower limit of 1% highly concerned, precisely the RMB exchange rate reform in 7 years, the biggest problem itself.

Accelerated issuance of exchange linked financial products

The euro dollar exchange rate has hit a new low for two years, and some exchange rate linked financial products began to accelerate.

However, it is not the right time to maintain the unilateral trend of exchange rate.

Industry experts say that the final yield of a product depends on many factors such as the target, starting and ending time, and product design.

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According to the reporter's observation, in the past two months, the circulation of exchange rate linked structured financial products has a distinct upward trend, but basically it is still a guaranteed floating income based financial product, and the main products are RMB financial products.

In product design, most of them are still based on single bullish or single bearish.

Puyi wealth researcher Wu Ningjiang said that the yield of exchange linked financial products depends on many factors such as the trend of the linked target, the start and end of the product, and the product design.

The US dollar's strong strengthening has little effect on the products that have been released recently, and the final income is affected by this effect. The main reason is that the product begins before the exchange rate trend reverses and the termination time is before the trend reverses again. Of course, the continued strength of the US dollar strengthens the single bullish dollar and the single bearish other currency expectations, which is conducive to the issuance of exchange rate linked financial products.

"This is mainly related to product characteristics. The most typical product is a touch on demand option."

Wu Ningjiang said.

Take the Bank of China's "game BY12133 - V RMB exchange market competition financial products" as an example, which is issued in June 27, 2012 by the Bank of China. The product is linked to the euro / dollar spot rate, and if the observation period is maintained during the observation period (08 years and 28 days in June 28, 2012), the linked index is always maintained at the observation level, and the return on investment is 5.20%.

If the observation index is higher than or equal to the observation level during an observation period during the observation period, the investment return rate is 0.5%.

That is to say, the yield of the product is only two possible, 5.20% or 0.5%.

The impact on textile and other export companies needs to be observed.

With the continuous strengthening of the US dollar index, the market's depreciation of the Renminbi (against the US dollar) is expected to grow.

In the view of brokerage analysts, if the renminbi will enter the "depreciation channel" in the future, it will "get together" with US exporters.

The appliance industry will benefit from this, and export pressure is expected to ease.

However, under the background of weak demand for overseas markets, how much will the devaluation of the renminbi affect the business performance of the listed export companies, which needs further attention.

More than 80% of its revenues in 2011 came from overseas markets and mainly settled in US dollars.

The company had expected to lose 5 million to 9 million yuan in the first half of this year (a profit for the same period last year), and the main reason for its loss is "appreciation of the renminbi".

The company's stakeholders told reporters that after the appreciation of the renminbi, some of the company's gross profit margin declined. Otherwise, if the RMB enters the devaluation channel in the future, it will enhance the gross profit margin and market competitiveness of export products to a certain extent.

Similarly, as a "big family" for US exports, superstar technology and Lu Tai A stakeholders also expressed similar views, that is, the depreciation of the RMB will play a positive role in promoting the operation of the company.

The export related business led the electronic stakeholders told reporters that if the RMB entered a depreciation channel, it could improve the export environment to the United States, but in addition to product settlement, because the company's purchases were also carried out in US dollars, the depreciation of the RMB had little effect on the export performance of the company.