Foreign Exchange Accounted For A Sudden Drop Of 70% Yuan Devaluation Truth Exposure

< p > > a href= "http://www.91se91.com/news/index_c.asp" > RMB to us dollar < /a > reached a low level of $6.2040 on Wednesday, the lowest since April 9, 2013.

The largest decline in offshore RMB spot in the past three days is more than 400 points.

Experts believe that the recent fluctuations in the renminbi show that the market is short of strength and fierce competition, and the short-term devaluation will continue to leak, but the depreciation time is not expected to last for too long.

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< p > however, the market has expected the short-term depreciation after the introduction of the new deal. However, the fluctuation of the RMB's intermediate price is less than 30 points. Meanwhile, the spot exchange rate's biggest drop of more than 500 points within three days still stunned the market.

The wait-and-see sentiment of the market is getting stronger, and the short term trend of the foreign exchange market is still in the fog.

According to the latest analysis by Reuters, facing the complex economic environment and changing market rules, the market and regulators are exploring the bottom line which can tolerate each other in order to find a new balance.

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< p > China Merchants Bank head office a href= "http://www.91se91.com/news/index_c.asp" > financial market < /a > Senior Analyst Liu Dongliang told the media: "after expanding the market, the rules of the market are not the same as before. Some of the unfirm funds have already come out. The previous rules of the game are not very adapted, and the risks will be relatively large, so the market is in a wait-and-see period."

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< p > strong > volatility amplification paction caution < /strong > < /p >

< p > most market participants believe that the RMB fell below 6.20 yuan on the 3 day, which is expected to reach the stage price target of the regulatory authorities and the market will have a rest.

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< p > judging from the current market situation, it is difficult to judge the trend of short-term RMB a href= "http://www.91se91.com/news/index_c.asp" > /a > /a. According to historical experience, with the rise of China's foreign trade activities, the warming of exports and the gradual stabilization of China's economy, the depreciation trend of RMB exchange rate will weaken and return to appreciation channel in the second half of the year.

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< p > there are also market participants who point out that the current price is quite sensitive, and the market and regulators seem to be watching.

In recent days, although there are large quantities of foreign exchange purchases by Chinese capital, the signs of suspected intervention are not very obvious. Whether the central bank will follow the policy of expanding the exchange rate and relax the daytime fluctuation management or reform the intermediate price system is worth paying attention to.

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The policy of loosening the exchange rate of RMB P means that the market rules are changing. Both enterprises, banks and regulators need time to digest the impact of this new deal.

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< p > Xie Yaxuan, director of macroeconomic research of China Merchants Securities, points out that expanding the volatility itself will bring different expectations to the exchange rate trend in the market, and push different market players to change their past strategies and hold and sell foreign exchange according to their own needs and judgments.

"As a financial institution, we can make full use of the expansion of the fluctuation space, so as to develop more derivatives and help individuals avoid exchange rate risks and speculative investments."

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< p > a bank trader said that the amount of foreign exchange settlement and sales decreased significantly over the past few days, and the amount of foreign exchange sold on Wednesday was even less than half that of normal.

Traders are also trying to adapt to the impact of the new rules.

After the new deal, the fluctuation of the exchange rate increased significantly, and the trading practices before traders obviously needed to be changed.

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< p > < strong > in the second half of the year or return to the appreciation channel < /strong > /p >

< p > both the huge trade deficit in February, the sharp decrease in foreign exchange holdings and the situation of foreign exchange settlement all confirm the corresponding market base for the depreciation of RMB launched in mid February.

The central bank loosened the exchange rate volatility and guided market expectations.

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< p > Xie Yaxuan said that the expansion of the wave policy triggered a sharp fall in the RMB should be phased. But considering the risk of turbulence in the external market and the downward pressure on China's economy, the RMB's decline and duration will exceed the imagination.

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< p > he explained that after the expansion of the exchange rate, more enterprises and individuals will be worried about the increase in exchange rate fluctuations and increase the holding of some foreign exchange, thereby increasing the demand for foreign exchange, which means that the depreciation of the RMB exchange rate will give rise to a self realization process over a period of time, thereby increasing the depreciation rate of the renminbi.

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< p > but the trend of exchange rate depends on the fundamentals of the economy.

Traders believe that with the rebound of international trade activities, the depreciation trend of the RMB exchange rate will be basically over by the end of the month, and will still return to the appreciation channel in the second half of the year.

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