RMB Will Bid Farewell To The Trend Of Depreciation.

In the past two months, the willingness of the market players to settle their foreign exchange decreased and the willingness to hold foreign exchange increased. The data on foreign exchange deposits and foreign exchange loans in the April financial statistics report released by the people's Bank of China are also evident: in April, foreign currency loans increased by 3 billion US dollars, compared with the figure of more than 20 billion US dollars per month from 1 to March, and the scale of April significantly contracted. On the contrary, foreign currency deposits in April increased by 21 billion 800 million US dollars, and the scale increased significantly over the first two months.

In April, the exchange rate of RMB against the US dollar continued to decline. Statistics show that in April, the central parity of RMB against the US dollar decreased by 0.10%. The renminbi's spot exchange rate against the US dollar has fallen by 0.66%. The central parity of RMB and spot exchange rate all fell for 4 months. In the middle of March, when the RMB expanded floating range, it had gradually moved to the market automatic behavior, which indicated that the RMB exchange rate began to enter a two-way fluctuation era.

"The slow down of foreign capital inflow and the expectation of RMB depreciation have led to a decline in the willingness of domestic residents to settle their foreign exchange." Zhou Jingtong, senior economist at the Bank of China (601988, stock bar) International Financial Research Institute, told our correspondent.

A large bank foreign exchange trader told reporters: "from the current exchange rate trend, the balance of foreign exchange sales is more balanced, the market sees more and sees empty renminbi, has the difference, is also bigger, does not look like one side to the side."

At the beginning of this year, the central bank emphasized that this year will gradually improve the RMB exchange rate formation mechanism and expand the exchange rate floating range in an orderly way. In February, the RMB began to depreciate significantly. After the significant depreciation in 2 and March, the willingness to hold renminbi has declined, and the situation of foreign exchange occupying has tended to be normal. It has also cracked down on speculation.

The decline of the RMB exchange rate has a positive impact on China, which is conducive to improving China's import and export situation and moderately preventing arbitrage. In addition, the two-way fluctuation of the RMB exchange rate has had a positive impact on cross-border capital flows, for example, enterprises are more willing to hold foreign exchange, and the willingness and motivation of forward purchase of foreign exchange will increase.

China foreign exchange Tan Yaling, President of the Investment Research Institute, said that under the unstable economic environment and market conditions, exchange rate fluctuations are natural phenomena. There is no need to worry too much. In the current situation, the depreciation of the RMB exchange rate is more conducive to the development of the real economy, but the greater the blow to speculative arbitrage will exacerbate the panic of these people.

Many market analysts said that RMB The stage of the trend of depreciation may have ended. First of all, at the beginning of this year, the exchange rate policy was adopted to resolve the asset price risk of the QE withdrawal from the Federal Reserve. appreciation The policy mix of higher interest rates is transferred to the policy mix of "exchange rate fluctuations + relative neutral interest rates". On the one hand, we must implement a prudent monetary policy internally, and expand the foreign exchange fluctuation area on the other hand, and use exchange rate fluctuations to reduce the stable arbitrage space of the spread. At present, the policy is effective.

Secondly, in the medium to long term, it is imperative to further open capital account. In this process, the key to holding RMB assets and driving RMB to come is stable return on investment, and whether the exchange rate of RMB will be stable will directly determine the effect of policy implementation.

Looking back in April, the pace of RMB devaluation has slowed down, and the two-way fluctuation characteristics of RMB will be enhanced in the future. Meanwhile, the scale of new foreign exchange will also be reduced due to the phased withdrawal of speculative capital.

Guan Tao, director of the balance of Payments Division of the State Administration of foreign exchange, said recently that although the RMB exchange rate has fluctuated, the fundamental factors that affect cross-border capital flows have not changed fundamentally. It is expected that cross-border capital flows will remain a two-way oscillation in the future. Under the background of China's balance of payments balance and RMB exchange rate approaching a reasonable equilibrium level, cross-border capital flows and two-way fluctuation of the RMB exchange rate will become a new normal.