Niu Wenxin: Moderately Depreciated Moderately Valued RMB

< p > RMB has seen a certain depreciation recently. The market speculated that this is the result of the initiative of the central bank.

In fact, many factors lead to the depreciation of the RMB.

Generally speaking, there are several such articles.

First, because foreigners are not optimistic about China's economic prospects, they withdraw their speculative or investment capital in China; secondly, there is a deficit in the balance of payments, at least the trade deficit is expected to occur; third, the central bank intends to intervene.

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< p > according to the recent situation that foreign forces are singing loudly about China, the current "a href=" http://www.91se91.com/news/index_c.asp "RMB depreciation" /a "is at least caused by multiple factors resonance.

But whatever the reason, we should welcome moderate depreciation of the renminbi which has been seriously overestimated.

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< p > some people say that high interest rates are aimed at curbing inflation and housing prices.

In fact, monetary policy is a double-edged sword.

Can high interest rates curb inflation and housing prices? If China is a closed country, that's fine, but China is an increasingly open country. There will be big problems in curbing inflation and housing prices with high interest rates.

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< p > simple logic is this: China's interest rate is too high (when there is interest rate offset by the cost of foreign loans and capital flows), a large number of "hot money" will come to China's arbitrage difference, and the inflow of hot money will push up the value of RMB (appreciation), which will form the RMB exchange rate gains, which constitute a stable return of hot money arbitrage.

Does hot money come to China to earn other investment returns? The real economy is good, they will invest in stocks, invest in real estate, have preferences, and if the real economy is bad, they may invest more in real estate.

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< p > from a global perspective, in many countries, the real estate market is generally more popular in its < a href= "http://www.91se91.com/news/index_c.asp" > currency appreciation /a >.

For example, in Japan and Southeast Asia, real estate prices were soaring.

Because in the environment of high interest rate and high exchange rate, industrial investment is very difficult, relatively speaking, real estate arbitrage appears easier.

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< p > to understand the above logic, we can see that the high interest rate environment leads to two vicious cycles.

First, the more we want to tighten up the currency, the more hot money inflows and the tightening of monetary tightening. Secondly, the more we try to curb housing prices through monetary tightening, the worse the real economy will be, and the more we will force more capital to flow to real estate, thereby pushing up housing prices.

In fact, China's economy has struggled in this vicious circle in recent years.

In this process, we have stressed that in any open environment, any country's monetary policy will lose its independence.

What is the independence of monetary policy? For example, "when all the strong currencies are loose, China is only tightening", which is the expression of independence.

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< p > "independence without independence" is the biggest mistake of China's monetary policy.

To suppress house prices and curb inflation, it is necessary to adopt a "different from routine" approach to keep China's monetary policy synchronized with the rest of the world and abandon or at least part abandon the independence of monetary policy, that is, lowering interest rates and letting the renminbi depreciate moderately will play an effective role.

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< p > a href= "http://www.91se91.com/news/index_c.asp" > monetary policy < /a > is a double-edged sword, because if the depreciation of RMB will stimulate foreign trade growth, China's trade surplus will increase again, forcing the RMB to appreciate.

Is it possible to curb exports by raising tariffs on export trade? In my view, this is the right way to maintain domestic economic stability.

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< p > it is worth noting that a recent statement is rampant.

They believe that the renminbi will depreciate and the real estate market will collapse.

At the same time, the international market has begun to clamour for bubbles in China's real estate market or credit.

Why did no one in the past link China's real estate bubble with the appreciation of the renminbi? This is clearly a policy of kidnapping China.

It is hoped that China's monetary policy will become more flexible and smarter, which is the key to China's economic health.

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