Experts: Has The Renminbi Been Seriously Underestimated?

In the first quarter of this year, the spot exchange rate of US dollar against RMB was 6.2180, or 2.71% in one quarter. Recently, the US Treasury issued a semi annual exchange rate report, saying that the renminbi was "seriously undervalued" and accused the Chinese government of intervening in the foreign exchange market on a large scale, resulting in the depreciation of the renminbi and its pressure on the RMB exchange rate.

In fact, the fact is very clear that since the fourth quarter of last year, the Fed began to withdraw from the quantitative easing (QE) policy. At the beginning of this year, China's export performance was weak, the trade deficit appeared in February, China's economic growth slowed down, and the RMB fluctuated. This is actually quite normal.

Exchange rate is the price of buying and selling foreign currency. In a normally functioning market economy, prices are determined by the equilibrium of supply and demand. If the price is lower than the equilibrium point, if the price is greater than the supply, it is necessary to raise the price to increase the supply to meet the market demand. If the price is higher than the equilibrium point, if the supply exceeds demand, the price should be reduced so that a wider range can meet the demand.

Accordingly, the international standard of exchange rate has formed a common standard, that is, the trade surplus (or deficit) accounts for GDP proportion, as long as 2% of the scope is regarded as a trade balance. This standard is internationally recognized. In the past, the United States used this standard to put pressure on the RMB exchange rate.

According to the data released by the National Bureau of statistics, the total trade surplus in China in the first quarter amounted to 102 billion 800 million yuan, the total GDP in the current period was 128213 billion yuan, and the trade surplus accounted for 0.8% of GDP. This shows that the use of this index to measure China's trade situation is still in the balance zone.

The US Treasury said that an important indicator to support such a judgement is China's huge accumulation. foreign exchange reserve 。 "The Chinese government has accumulated $3 trillion and 800 billion in foreign exchange reserves, far exceeding the amount required to measure the caliber. Even so, the Chinese government bought a large amount of foreign exchange in the first quarter, which indicates that China continues to hinder the market formation mechanism of the exchange rate.

The renminbi has never been seen before, calling on the Chinese government to increase its regular disclosure of intervention in the foreign exchange market. If the recent fall in the renminbi suggests that the Chinese government intends to abandon the policy of marketization of the RMB exchange rate, it will cause serious concern to the US side. It can be seen that the judgment of the so-called "serious underestimation" of the US Treasury is derived from China's continued growth in foreign exchange reserves, but it does not take into account the current slowdown and rebalancing of China's economy and the actual Renminbi. Effective exchange rate There is overshoot problem.

According to the state foreign exchange According to the authority's data, China's foreign exchange reserves totaled US $3 trillion and 820 billion at the end of 2013, while the balance of foreign exchange reserves at the end of the first quarter of this year was US $3 trillion and 950 billion, and the foreign exchange reserves increased by nearly US $130 billion. We need to make specific analysis of the increase in foreign exchange reserves. There are two main sources of increase in foreign exchange reserves, that is, current account surplus and capital account net inflow.

It is generally believed that the serious underestimation of a country's currency is based on its trade imbalance, which is mainly due to the large surplus in current account. But China's current situation has changed. The 2013 China balance of payments report released by the State Administration of foreign exchange showed that the current account surplus in 2013 accounted for 2% of the GDP in the international standard, and trade was in a state of equilibrium.

Affected by the depreciation of the RMB, the capital inflow brought by arbitrage funds has been greatly reduced since February. The balance sheet of the monetary authorities announced recently by the central bank showed that the foreign exchange held in February (the central bank held the scale of foreign exchange in local currency) was 128 billion 246 million yuan, which was 71% lower than the 437 billion 360 million yuan in January. According to the analysis and prediction, the foreign exchange occupation in March has been restored on the basis of February, but the total amount is about 200 billion yuan. From the above analysis, we can see from the real economic data that the US does not support the judgment of the US dollar being "seriously underestimated".