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Great Depreciation Of RMB Has Aroused Thousands Of Waves.

2014/4/6 18:01:00 46

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The biggest news in the financial market in the first quarter of P is not this but the depreciation of the RMB exchange rate, which is far ahead of market expectations no matter time or magnitude.

In the first quarter of this year, the yuan depreciated by 2.64%, which almost eliminated the appreciation of last year. This is the largest and longest cycle of RMB exchange rate depreciation since the reform in 2005.

What's wrong with the RMB?

RMB devaluation in the first quarter

almost sped up last year .

In the first quarter, the spot exchange rate of RMB against the US dollar slipped from 6.0539 (December 31, 2013) to 6.2180 at the end of March, down 1641 basis points, and the depreciation rate was 2.64%. P

This data is close to the appreciation rate of RMB spot exchange rate of 2.9% in 2013.

Since the exchange rate reform in 2005 P, the renminbi has almost never gone back to its appreciation. The trend of RMB spot exchange rate against the US dollar has been appreciated for 9 consecutive years from 2005 to 2013. The year's K-line is 9 plus Yang. The biggest appreciation is 2007 and 2008, and the appreciation rate has been over 6% for 2 consecutive years.

In this way, the exchange rate of the RMB against the US dollar increased from 8.2765 at the end of 2004 to 6.0539 at the end of 2013 and 27% in 9 years.

the appreciation of the 9 consecutive years has made the market maintain a habit of thinking about the appreciation of the RMB. Therefore, we predict when the RMB exchange rate against the US dollar will be 6 in 2014. However, no one thought that the market suddenly came to a 180 degree turn. Since February, the RMB has depreciated rapidly. The magnitude of the quarterly depreciation has almost erased the appreciation of last year. The depreciation of the first quarter of this year is the largest and longest cycle of RMB exchange rate depreciation since the reform and exchange rate, which greatly changed the market's expectation of the exchange rate trend.

, therefore, the significant devaluation of the RMB is obviously the most stirring news event in China's financial market in the first quarter.

At the beginning of the P, the market generally believed that the devaluation of the RMB was the influx of arbitrage funds by the central bank. Therefore, although the expectation of unilateral appreciation of RMB was weakened, the market still regarded the appreciation of the RMB as the dominant trend.

This expectation was reversed in March 7th. On the day of the first single default in the Chinese bond market, the commodity market began to show signs of large-scale flat market, and the RMB exchange rate suffered heavy losses, with a daily drop of 0.12%, and the market panic began to ferment. At the same time, the market was surprised that the central bank did not take any obvious measures to support the market. In March 8th, the middle price was very "respecting the market" and even further down to 6.1312. The central bank's clear attitude of "going along with the market" completely differentiated the market's expectation of RMB, and the tolerance of the central bank to RMB devaluation was obviously higher than that of the market.

March 17th, the central bank announced that the intraday volatility of the RMB against the US dollar expanded from 1% to 2%, which is the third expansion of the RMB exchange rate range after the central bank in 2007 and 2012. The expansion of the volatility means that the RMB exchange rate should be further enhanced and the floating exchange rate system will be further established.

if the expansion is the institutional construction that the central bank needs to achieve, the differentiation of RMB appreciation is a more important market psychological construction for the central bank.

RMB a href= "http://www.91se91.com/news/index_cj.asp" > unilateral appreciation > /a > is expected to have plagued the regulatory authorities. The exchange rate gap and the domestic and foreign spreads caused by the continued appreciation of the RMB have continued to attract overseas capital to enter through various channels, and the unilateral market has greatly restricted the independence of the central bank's monetary policy.

For a long time, the continued increase in foreign exchange has become an important channel for the issuance of "Chinese style" currency, which limits the operation space of monetary policy.

through the current round of depreciation, the expectation of unilateral appreciation of RMB has been divided.

Two way fluctuation is a real market, which is conducive to finding reasonable prices, and more conducive to the optimal allocation of internal and external resources.

< a > href= > http://www.91se91.com/news/index_cj.asp > > hot money < /a > accelerate the escape from commodity crash > /strong > /p >

The great depreciation of RMB P in the first quarter has little impact on ordinary people. It is nothing more than a small amount of RMB in exchange for us dollars. The absolute value of the depreciation rate of 2.64% is not large. If we travel to the United States for shopping now, it will cost US $10 thousand, and now we have to spend more than RMB 264 yuan. This feeling of difference is not very obvious.

however, the loss of RMB to some speculators who use arbitrage of foreign exchange spreads is very great. Therefore, the depreciation of the RMB this year has triggered a great shock in other markets. For example, the RQFII-ETF fund suffered massive redemption, hot money escapes quickly, and there is a big shock in the bulk commodity market, such as the plunge of copper price, and the exchange rate fluctuation is an important factor.

The reversal of the p value from the expected appreciation to the depreciation has accelerated the escape of hot money. One manifestation is that the RQFII-ETF fund suffered a rare large-scale redemption since March.

According to statistics, as of March 27th, the 14 RQFII funds included in the statistics were up to 613 million 500 thousand redemptions, of which the number of redemptions in the South A50 amounted to 468 million 500 thousand, representing a net outflow of 3 billion 900 million yuan of funds.

Prior to January, the 14 RQFII funds included in the statistics were up to 229 million 400 thousand fund units. Among them, the southern A50 had received 192 million net purchases, equivalent to 1 billion 700 million yuan of inflow capital.

The large redemption since March shows the reversal of RMB expectations.

at the same time, according to EPFR Global statistics, from March 12th to March 19th, the net outflow of Chinese equity funds exceeded US $1 billion 500 million, the largest weekly net outflow since January 2008.

Among them, the amount of capital redemption of investors on China's stock base has also set a historical record.

these phenomena show that due to the devaluation of the RMB, the lack of arbitrage space will accelerate the escape of hot money.

The RMB arbitrage has suffered a lot during this period. According to Hongkong banking professionals, the sharp depreciation of the renminbi will bring a devastating blow to arbitrage pactions that bet on the appreciation of the renminbi.

Many investors borrow money from Hongkong's banking industry, and then buy RQFII and other related RMB assets to arbitrage.

If the magnitude of the depreciation of the renminbi has been depreciated since the beginning of this year, the losses of the investors in the arbitrage paction will be as high as 14 billion US dollars.

in the devaluation of the RMB, the commodity market also fluctuated greatly. Among them, the demand for the metal copper financing, which was dubbed "Dr. copper", was suppressed, resulting in a panic in the copper market, which fell more than 10% this year.

for a long time, < a href= "http://www.91se91.com/news/index_cj.asp" > financing import < /a > hidden danger for commodity plunging.

As domestic interest rates continue to rise and banks restrict loans to steel and other industries, many enterprises borrow loans such as low interest dollars, imports of iron ore and copper to enjoy the advantages of interest rate and RMB appreciation. This leads to a continuous rise in the import of iron ore and copper, and does not reflect the real market demand.

The depreciation of RMB P led to a sell-off. Iron ore and copper as collateral for financing are facing the risk of additional margin and forced liquidation by banks. Therefore, iron ore and copper took the lead in plunging.

In the subsequent stage of the copper financing process, it is necessary to use Renminbi to buy US dollars to return the funds. The depreciation of the RMB will mean that we need to buy more dollars with more Renminbi instead of enjoying the profits brought by the appreciation of the renminbi as before.

And during the RMB crash, investment banks increased the proportion of copper margin payment to finance copper arbitrage ahead of time, and played a role in fueling the fall in copper prices.

March 10th and 12th, the main contract of Shanghai copper futures plunged sharply, which was obviously related to the depreciation of the RMB. Although the price rebounded at the end of March, the copper price dropped more than 10% in the first quarter.

, therefore, the change of RMB exchange rate has great influence on the market.