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RMB'S Local Depreciation Has Hidden Challenges Of Spanformation.

2014/3/20 22:31:00 17

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Since February, the RMB exchange rate has fallen continuously for P. But so far, the market has not been able to determine why there is a decline in the value of the RMB with unilateral appreciation expectations. The mainstream view is that the central bank has taken the initiative to guide it. For example, the central bank recently announced that it would relax the floating rate of RMB against the US dollar to 2%, which was seen as the central bank taking advantage of the weakening of the RMB exchange rate to push forward the exchange rate reform and sniping the continued inflow of hot money. 
 the central bank said that the change of the RMB exchange rate mainly depends on the foreign exchange supply and demand based on the balance of payments, which reflects the central bank's determination that the current exchange rate is approaching equilibrium. This judgment is not the central bank's subjective behavior, but based on the balance of payments and economic growth. For example, in 2013, the ratio of China's current account surplus to GDP has dropped to 2.1%, the balance of payments has tended to be balanced, and the RMB exchange rate does not have a substantial appreciation base. At the same time, China's fiscal and financial risks are controllable, foreign exchange reserves are abundant, and the ability to resist external shocks is strong. 
 the current market expectation of RMB appreciation is that the Chinese government will continue to stimulate economic growth. However, at present, the central government seems to abandon the practice of stimulating high growth, which will make the market doubt about the appreciation of the renminbi. At the same time, in the process of economic slowdown and spanformation, the problem of long-term accumulation of China's economy will focus on the outbreak, which will form the pressure of RMB depreciation. 
 for example, in the first two months of China, < a href= "http://www.91se91.com/news/index_c.asp" > economic data < /a > is not ideal, and not only super day debt default, but also real estate enterprises burst out of "insolvent", and first tier cities housing prices have begun to loose or even fall. The resonance of many factors has led to a dim market expectation of RMB appreciation. 
 in this atmosphere, the expansion of the RMB exchange rate < a href= "http://www.91se91.com/news/index_c.asp" > floating interval < /a > can enhance the floating elasticity of RMB exchange rate and prevent the continuous inflow of hot money. However, the Central Bank of China has the ability to maintain the normal floating of RMB nominal exchange rate and the stability of exchange rate level, but it can not prevent capital outflow from depreciating expectations. Just as in the past, expectations of large capital inflows due to appreciation expectations, the expectation of devaluation may also start the opposite process. 
 at present, there is a view that < a href= "http://www.91se91.com/news/index_c.asp" > RMB < /a > will face long-term appreciation in the future, at least before the internationalization of RMB. This view is based on the fact that the Chinese government will persist in implementing a major strategy. The internationalization of RMB is considered to be one of the signs of China's rise. Therefore, China will not abandon the goal of RMB internationalization. The premise of internationalization is the strength and stability of the currency. 
 but this judgment may be hasty. In the smooth spanition of economy and internationalization of RMB, the Chinese government will choose the former. Before the success of China's economic spanformation, it is impossible to promote the internationalization of RMB. Now, the spanformation has just begun, and many reefs have not been exposed. At the same time, as the president of Zhou Xiaochuan said, the homework for the internationalization of the renminbi is not yet well done. 
, therefore, the RMB will face long-term devaluation pressure due to various shocks in the future. This environment may encourage continuous outflow of capital and further exert pressure on the RMB value. This is the inevitable cost of China's economic spanformation. In this process, the appreciation or depreciation of the RMB will impact the real estate industry, and the relationship between real estate and finance is so close that the economy will face unknown risks. Therefore, China must face up to the pressure and challenges brought about by the economic slowdown and the expected depreciation of the RMB. It is urgent to start the incremental reform as soon as possible and cushion the impact of the spanformation.