China'S Central Bank Should Ask Questions If The Renminbi Is Weakening.

The depreciation of P is still continuing.

From April 9th to April 24th, the RMB exchange rate against the US dollar depreciated from the strongest 6.1850 yuan to the weakest 6.2509 yuan, and the 12 trading days depreciated 659 points or 1.05%, which widened the depreciation rate since the beginning of the year to 3.12%.

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< p > the view of the market on the trend of RMB exchange rate is changing.

In the past, the market thought that the devaluation of the renminbi was only a phased fluctuation, but now the market expectation is changing to the direction of sustained depreciation.

Many foreign bank traders said that many forward settlement in the second half of last year is now in a state of weakness. The pace of RMB devaluation has accelerated significantly. If the RMB continues to depreciate and stand on 6.25 yuan, the purchase of foreign exchange will be more violent and it may be reduced to 6.3 yuan.

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< p > for this round of continued depreciation of the RMB, the market almost unanimous view is: the Central Bank of China is guiding the RMB exchange rate to go down, changing the trend of unilateral appreciation of RMB.

The purpose of the central bank's move is to launch a more market-oriented exchange rate formation mechanism, and to fight against the influx of funds that pour into the domestic market to speculate on RMB appreciation. Two, we hope to ease the pressure on Chinese exporters.

The fall of cliff cliffs is not only a blow to foreign capital, but also choke up some of the funds that have not been outflow, otherwise the funds will have to go away.

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< p > the financial regulators have paid close attention to the devaluation of the RMB, but think this is only a short-term factor.

The director of the balance of Payments Division of China's safe, last week, told the market that exchange rate fluctuations had a crowding out effect on arbitrage pactions in the early bullish unilateral appreciation of the renminbi, and released the demand for clearing foreign exchange, which in turn promoted the pressure of exchange rate fluctuations and outflow of funds.

He believes that although the RMB exchange rate has fluctuated, the fundamental factors that affect cross-border capital flows have not changed fundamentally, and the two-way oscillation of cross-border capital flows and exchange rates in the later period will become a new normal.

The safe also noted that the trend of RMB a href= "http://www.91se91.com/news/index_cj.asp" > exchange rate < /a > can not be seen simply from the relationship between supply and demand of commodities, but more and more like changes in asset prices such as stocks and bonds.

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< p > in our view, under the background of the pressure of China's economic downward pressure, the negative effect of RMB devaluation strategy will be magnified.

Since the central bank expanded its exchange rate to 2% in March, we have analyzed that the central bank's move is "stepping on the wrong track on the right path", although it is pushing forward the market-oriented reform of exchange rate, but the timing of the reform is wrong, which provides an important subject for the RMB's devaluation.

Now it seems that the market has been unable to digest because of the devaluation of the RMB.

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Chen Gong, principal researcher of Ampang consulting, said in an internal discussion that regulators should pay attention to the negative role of the depreciation of the RMB and adjust the policy on P.

First of all, the devaluation of the RMB basically does not help China's exports. Although the devaluation helps exports, the market reaction will not come so fast. Moreover, many problems faced by China's export market are caused by structural factors, and there will be no major changes due to depreciating the value of the renminbi. The structural adjustment of similar export products will take time.

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< p > secondly, < a href= "http://www.91se91.com/news/index_cj.asp" > RMB < /a > devaluation has a great impact on China's a href= "http://www.91se91.com/news/index_cj.asp" > foreign investment < /a >, and has increased investment cost.

China is now on the upward track of foreign investment, and this kind of self promotion cost is not optimistic.

Once again, the practice of big devaluation will be penny wise and pound foolish. The stability of China's economy will externally manifest itself in the stability of currency value. If China fails to ensure currency stability, it will inevitably affect the external environment's evaluation of China's economic growth prospects.

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< p > is it possible for the external market to induce the Central Bank of China to resist the depreciation of the RMB? In Chen Gong's view, this possibility exists. The strategy of RMB short sellers is in line with the various factors of the current economic environment.

Even if this is the case, the Central Bank of China should respond to it. If the central bank does nothing, it will lead to market misjudgement and induce more capital to enter the market. If the depreciation of RMB becomes the general trend and the capital flows out of China, the trouble in China will be great! < /p >

Generally speaking, under the condition of strict regulation, there is a need for the Central Bank of China to moderate the RMB exchange rate, and the possibility of successful intervention is also great. P

From the point of view of the global central bank, if the Central Bank of China has successfully defeated the RMB devaluation, the Central Bank of China will score a lot. Its comprehensive significance and value will be very obvious.

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