RMB Exchange Rate Expanded Range Is Expected To 2%

< p > a number of people from the banking and financial market told reporters that the short-term devaluation of the RMB in addition to cracking down on arbitrage funds for long-term settlement and restraining the continuous influx of hot money, improving the expectation of RMB exchange rate volatility is also a good preparation for expanding the fluctuation range.

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< p > "this is a great possibility."

Societe Generale Bank chief economist Lu political commissar told reporters.

The head of China's Research Department of a global financial market in Shanghai, a foreign investment bank, also said that the mainstream market expects that the central bank will adopt a gradual approach, which will be expanded from 1% to 2%, and is expected to be completed at the latest in the fourth quarter of this year.

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< p > < strong > 2% is the mainstream consensus. < /strong > < /p >

< p > < < a href= > http://www.91se91.com/news/index_c.asp > RMB exchange rate > /a > the possibility of fluctuation to 2% is very large. At present, this is also the main expectation of the market.

A city commercial bank financial market people said that for short-term arbitrage funds, the volatility of the market will be more difficult to grasp the time after entering and leaving the market, will face greater risks.

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< p > the most recent move to expand the RMB exchange rate volatility was in April 2012, when the floating rate of RMB against the US dollar in the inter-bank spot foreign exchange market expanded from 5/1000 to one percent.

Further back in May 2007, the floating range increased from 3/1000 to 5/1000.

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"P >" when we submitted to the "a href=" http://www.91se91.com/news/index_c.asp "regulatory authority < /a >, we proposed that the RMB exchange rate fluctuate from 1% to 2% and then expand to 5%.

But in the past two years, there has been no movement.

A bank official in Shanghai who declined to be named told reporters.

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< p > however, the expectation of the market has begun to become optimistic under the combined factors such as the recent devaluation of the RMB.

According to the bank, the next thing that will happen in the foreign exchange market is to expand the floating rate of RMB, and the setting of the benchmark interest rate of the PBoC will be changed from daily to weekly (or even monthly).

Citigroup Chinese economist Shen Minggao also believes that the focus of financial reform in 2014 will include expanding the RMB trading range.

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< p > in fact, the central bank governor Zhou Xiaochuan wrote at the end of November 2013 that he will expand the floating range of RMB exchange rate in an orderly way according to the development of foreign exchange market and the economic and financial situation, enhance the two-way floating elasticity of RMB exchange rate and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

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< p > "if only expanded to 1.5%, it seems to be more conservative, 3% is radical, and the market and the government are afraid to accept it."

Considering the external market fluctuation factors, it is expected that the central bank will expand the range from 1% to 2% in a gradual way.

The above a href= "http://www.91se91.com/news/index_c.asp" > foreign investment bank < /a > director said that this is also the consensus formed by many foreign institutions at present.

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< p > reporters understand that the market expected time is that the central bank will soon expand the volatility of the RMB exchange rate in the second quarter and the latest in the fourth quarter of this year.

"With the withdrawal of QE from the US Federal Reserve, the recovery of the US dollar is a general trend.

Time is no longer waiting for us. Only by widening the range of fluctuation can the RMB be sufficiently flexible.

Otherwise, we can not achieve two-way fluctuations through devaluation, but will continue to appreciate. "

Lu commissar analyzed.

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< p > < strong > seeing more than expected is difficult to change < /strong > < /p >

< p > the director of Shanghai foreign investment bank explained to reporters that the sustained depreciation and expansion of volatility are closely related in essence.

Because the depreciation will break the expectation of the overseas capital's rigidity appreciation to the RMB, and then expand the scope after the two-way fluctuation, the certainty of the appreciation expectation will further decline.

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The P > Guang Fa Securities Research Report also believes that the review of successive remittance changes and the expansion of each exchange rate range are considered to be the signal of the appreciation of the RMB.

However, from time to time, management has passed the judgement that the RMB exchange rate has reached the equilibrium level.

Therefore, in order to dispel the market's inertia expectation, the decision-making level intends to raise the fluctuation expectation of RMB before the policy adjustment, so as to maintain the RMB value in a relatively balanced range.

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< p > however, the financial market department of the above city commercial banks said that after the expansion of the RMB exchange rate, if overseas funds are not short-term arbitrage, they only need to lengthen the paction time, and still insist on doing more RMB, because the domestic steady growth expectations continue to exist.

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< p > for this reason, Steve Blaise, chief investment strategist and Global Investment Committee of Standard Chartered Bank, also told reporters in Shanghai recently that overseas funds are still optimistic about the long-term appreciation trend of RMB exchange rate. From the trend of RMB over the past 3-4 years, there has been a short-term devaluation phenomenon. It was just offshore offshore market, rather than onshore market.

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< p > he explained in detail that in the case of RMB bonds, the yield of corporate bonds in the 2-3 year period in 2014 is about 6%. For overseas investors, if there is still an appreciation expectation of RMB 1%-2%, the total yield will reach 7%-8%.

The attraction for overseas investors is still very large.

"Now the US Treasury yields are below 3%. Compared to other emerging markets, although their bond yields are also rising, there is a devaluation trend in the exchange rate."

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