Analysis Of The Impact Of RMB Exchange Rate Changes

< p > since mid January 2014, the a href= "http://www.91se91.com/news/index_cj.asp" > RMB < /a > has fallen continuously against the US dollar, and the relative depreciation rate has reached 0.4%.

As a result, all kinds of guesses and speeches are flying everywhere.

In the real estate market, some people believe that the depreciation of the renminbi and capital outflow, the real estate market to "collapse", the real estate market outlook pessimistic.

The news report also helped to exaggerate the sharp reduction of housing prices in Hangzhou and other cities.

Then, how can we clearly understand the reasons for the recent depreciation of the RMB exchange rate and how to clarify the relationship between exchange rate and housing prices? < /p >

< p > < strong > is the depreciation of RMB or the strength of the US dollar in the near future? < /strong > /p >

< p > the recent weakening of the RMB exchange rate against the US dollar depends on the two factors.

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There is always one currency reason for the change in the ratio between the two currencies (P).

Since the exchange rate reform in July 2005, the general trend of RMB to us dollar parity has risen. Although there has been a rapid decline in 2009, the trend of appreciation has not changed.

By December 31, 2013, the appreciation rate of RMB against the US dollar has reached 35.9%, with an annual average appreciation rate of nearly 4%, which is higher than the average interest rate of RMB in the same period.

There is no doubt that during this period, the economic situation of China and the United States both supported the appreciation of the renminbi.

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< p > a sustained appreciation of a currency is driven by a steady economic situation, especially a good balance of payments.

Since China's accession to the world trade organization, its external trade surplus has continued to expand and its current account has been running smoothly for a long time.

The United States, after the second half of 2005, the real estate market bubble has emerged, systemic risk accumulation, and finally broke out in early 2007, the financial crisis, the rapid economic downturn, the dollar against major currencies are devalued.

In addition, in response to the crisis, the Fed sharply reduced interest rates, adopted the quantitative easing policy and the absolute level of the benchmark interest rate dropped to 0.25%. The quantitative purchase of the bad assets of systemically important financial institutions, the failure of monetary delivery and the lifting of the economy by monetary liquidity results in the weakening of the US dollar and the devaluation of the major currencies.

In the same period, China's economic situation can be said to be unique in the world. Although it is also affected by external crises, the two factors of "growth" and "balance" maintain the value of RMB against foreign currencies.

The recent weakening of the RMB exchange rate against the US dollar is more important for us to support the strengthening of the US dollar in terms of both factors.

First is the withdrawal of quantitative easing policy and the possibility of increasing interest rates, followed by the recovery of the US economy and the good momentum of the capital market. Finally, the new chairman of the Federal Reserve took office and changed its policy mentality.

Therefore, the recent change in the RMB exchange rate is not so much the depreciation of the renminbi as the appreciation of the US dollar.

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< p > strong > RMB exchange rate change depends on expectation < /strong > < /p >.

In 2014, domestic and foreign expectations of RMB and US dollar changed. As early as the first half of 2013, the Federal Reserve's quantitative easing policy gradually withdrew from the US dollar, leading the US dollar to strengthen expectations.

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< p > no matter exchange rate or house price, expected change is the main driving force.

The fluctuation of exchange rate, interest rate, commodity or asset price is a reflection of market expectation. What kind of anticipation is there in the market? What kind of behavior choice do traders have?

It is expected that RMB appreciation will occupy a leading position, and when it comes to behavior choice, it will buy renminbi, throw or hold less US dollar.

The result of such a market choice is the inevitable appreciation of the renminbi.

Then, how is the expectation formed? It is the result of "communication" between the central bank or monetary authority of sovereign currency issuing.

This communication is not a comparison between two parties, but a public notice of monetary policy intention, and a communication between power departments and the public.

The Fed's policy intentions need to be explained to Congress, and through various channels to inform the public, enhance policy pparency, in order to guide social expectations, achieve the desired regulatory objectives and effects.

The appreciation of the renminbi is expected to come from the pressure of the international community, and the major developed countries are putting pressure on the RMB exchange rate. The purpose is to reverse the unfavorable balance of current account receipts and curb China's rapid rise.

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The exchange rate is an effective weapon for economic competition among countries. P, since 1985, the most obvious example is the domestic economic recession caused by the appreciation of the yen.

In July 22, 2005, under the external pressure, the renminbi embarked on the path of appreciation.

In fact, before 2007, the appreciation rate of the RMB exchange rate was not large, but the outbreak of the subprime crisis accelerated the appreciation of the renminbi.

The easing of the US dollar is viewed as an "beggar thy neighbour" policy choice in the open global economy, which is equivalent to the depreciation of the currency exchange rate.

At that time, it was called the policy of currency release without deadline, which guided the anticipation of international capital.

The dollar will naturally depreciate, so the currency of appreciation can only be RMB, because China's economy, finance and balance of payments are relatively stable.

After 2009, it was the sovereign debt crisis in the eurozone. The exchange rate between the major currencies was volatile. China's economy was relatively stable. It naturally attracted the attention and patronage of international capital, and the RMB continued to appreciate.

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In 2014, the expectations of the RMB and the US dollar have changed at home and abroad. As early as the first half of 2013, the Federal Reserve put forward the quantitative easing policy, which led to the stronger expectation of the US dollar in the first half of 2013.

The policy ideas of the US Federal Reserve Chairman Yellen may be different from its predecessor. The emergence of new figures will inevitably bring new market policy expectations and increase confidence in the economic prospects of the United States.

The slow recovery of the US economy can be reflected from the changes in the US stock market. Dow has recovered beyond the level before the financial crisis, and the attraction of the financial market has increased again.

In contrast, the downward pressure on China's economy still exists, business sector starts to run short, fiscal revenue growth slows down, local debts and other issues increase the uncertainty of economic growth.

Obviously, neither the internal and external expectations are enough to support the strengthening of the RMB against the US dollar.

However, based on short-term factors, it is concluded that the RMB exchange rate begins to depreciate.

The RMB exchange rate does not have the conditions of significant depreciation for a long time.

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What is the relationship between RMB devaluation and housing price? < p > < strong > RMB < /strong > < /p >

< p > China's real estate market is unlikely to have a systemic crisis because of the depreciation of the exchange rate, and the possibility that the RMB exchange rate will continue to depreciate in 2014 will not exist.

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< p > currency's internal depreciation and external appreciation is a paradox.

Higher prices and higher housing prices are related to money supply.

As the appreciation of the renminbi is expected to cause external capital inflows, the central bank is forced to buy foreign exchange and put in the underlying currency.

This mechanism is established, but the central bank also increases liquidity through the open market's Hedging and the rapid growth of foreign exchange.

From this point of view, the increase in foreign exchange has led to an increase in base money and the logic of pushing up housing prices is not true.

Investment in real estate after some hot money inflows exists, but it is not a universal phenomenon, nor is it enough to determine the trend of real estate prices.

The main thrust of housing price is the demand of domestic residents. This demand is also formed under the expected effect.

Expectations are nothing more than housing endowment, housing admission and housing support.

In addition, Chinese owners' experiences and landlords' satisfaction and utility experience far exceed the feelings of "house slaves".

This housing price expectation is also changing quietly.

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< p > under the general keynote of the new government's "loose and tight" monetary policy, monetary operation is actually relatively tight, because China's banking institutions are accustomed to the idea of sustained growth in performance, and the operation mode of multi-level decomposition and subcontracting of tasks has intensified the contradiction of currency allocation that does not increase significantly, and there has been a "money shortage" in the money market.

The high interest rates, bonds and financial returns reflect the conflict between the macro policy orientation and the micro individual goals, and the "fallacy of fallacy" has become the "fallacy of decomposition" in the market.

Since interest rates are also rising, competition for funds is becoming more and more intense. The impact of capital intensive industries in various industries is the most direct and severe.

The real estate industry is such an industry.

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Compared to P, China's housing prices are high, especially in the context of the appreciation of the RMB exchange rate, compared with the United States is higher.

Now that there is imbalance, there is a need for correction. From the point of exchange rate, the exchange rate depreciation is certain, and the nominal price is unchanged.

If China's housing price tends to balance in the exchange rate adjustment, domestic investors will weaken the tendency to invest abroad.

This is also a very important factor in changing expectations.

From this point of view, even if the RMB exchange rate is reduced to a certain extent, there will not be a "pushing wall" force on housing prices.

Because the strength of house price rising is simply not the appreciation of exchange rate. The fundamental factor is China's special national conditions, which is caused by the contradiction between the three people, the land and the housing.

China's housing price problem can not be generalized. In such a big country, the regional differences are obvious. The price fluctuation is very normal. If the housing prices drop in some cities, it will not be enough to spread the "collapse theory" of the Chinese real estate market.

A year ago, housing prices in Wenzhou and Erdos (600295, stock bar) had fallen a lot, while the overall housing prices in the whole country did not drop.

There will not be a systemic real estate crisis in China because there is no obvious change in the basic population structure and quantity, total land volume and structure, and national savings level that determine the real estate market demand.

In order to cope with the structural contradictions of population, the two child policy, the high savings rate caused by aging, the policy requirement for effective arable land and the acceleration of urbanization process are all the driving factors of the real estate market demand.

The real estate market in China is unlikely to have a systemic crisis because of the depreciation of the exchange rate. Moreover, the possibility that the RMB exchange rate will continue to depreciate in 2014 will not exist.

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< p > < strong > how should we guide the policy at the policy level? < /strong > /p >

< p > a strong currency exchange rate is very important in promoting the reform of the mechanism of exchange rate marketization, promoting the free convertibility of capital account and raising the level of RMB internationalization.

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< p > positive and positive expectations are vital to the sound and sustainable development of a country's economy and society.

It takes a process to reverse the original pattern and system inertia and change past habits.

As far as the RMB exchange rate is concerned, the strength of the currency comes from the strong economy of the country and the status of a big country with international responsibility and influence.

Currency stability is conducive to the stability of foreign economic and trade, and also conducive to the steady operation of the open financial market.

China is a responsible big country. It does not seek hegemony in international affairs. It is an important force to maintain fairness and justice in the international community.

With the improvement of the status of the country, its position and influence in the international economic system are also improving.

Therefore, in the long run, the renminbi will not continue to depreciate.

In the short term, it is expected to cause some devaluation pressure, but these expectations are not enough to affect the main tone of the stable ratio of RMB.

It is impossible for the renminbi to turn to a sustained depreciation.

The RMB exchange rate can only rise or depreciate in general and upward while the short-term factors affect expectations.

This is determined by China's economic development prospects unless development is unsustainable.

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< p > for China's real estate market, higher housing prices need to digest for a period of time, and short-term adjustment is also possible, but this is not a dominant factor in exchange rate changes. At best, the exchange rate is a small factor, and there is no need to worry that it will cause systemic risk.

The phasing adjustment of the real estate market helps stabilize expectations and reduce unnecessary short-term risks.

Therefore, in the process of promoting the formation mechanism reform of exchange rate marketization, promoting the free convertibility of capital account, and promoting the internationalization of RMB, a strong currency < a href= "http://www.91se91.com/news/index_cj.asp" > exchange rate < /a > is very important.

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