The ECB Or The Renminbi Will Be Included In The Foreign Reserves.

Citing two people familiar with the matter, members of the European Central Bank's management committee will hold a meeting in Frankfurt in October 15th to discuss whether preparations for RMB will be included in foreign exchange reserves. People familiar with the matter also revealed that if the European Central Bank decides to buy the renminbi, the initial purchase will be very small, and it may start buying within the first year.

If the European central bank takes the renminbi into its foreign exchange reserves, it will mark an important progress in the internationalization of RMB. According to IMF data, although China is the second largest economy in the world, the proportion of RMB in foreign exchange reserves is not high. The US dollar accounted for 61% of the total.

According to Bloomberg, officials will assess the special drawing rights (SDR) set up by the International Monetary Fund. The special drawing rights are set in a basket of currencies made up of euros, Japanese yen, sterling and US dollars, excluding Renminbi before 2015. China hopes that the renminbi can join the "basket of currencies".

In September this year, British Treasury Secretary Osborn and vice premier Ma Kai announced that the United Kingdom would issue Renminbi denominated treasury bonds and become the first issue country in western countries. Osborn said that with the internationalization of the renminbi, the issuance of RMB bonds will be included in the British foreign exchange reserves. In March this year, the Bundesbank and the Central Bank of China agreed to cooperate in the payment, clearing and settlement of Renminbi.

Today, former German central bank governor weber It is expected that the renminbi will play a bigger role in the world and the renminbi will appreciate. In February of this year, Yves Mersch, executive director of the European Central Bank, said that considering the size of China's economy and its importance in international trade and finance, the yuan might eventually challenge the US dollar. The authorities and investors need to be prepared, and the renminbi will play a more important role in the future.

An ECB spokesman said the agenda of the ECB meeting was confidential and declined to comment further.

The US dollar has been very pleased with Asian currencies for several months, but there is one currency, except our currency.

The appreciation of the RMB against the US dollar in the past 3 months was 1%, much better than that of the 6.2%, 4.8% and 2.7% of the won, the rupiah and the India rupees.

"The renminbi has proved its position as a safe haven currency against the backdrop of a strong dollar and will continue to play such a role," Darius Kowalczyk, economist at Credit Agricole, said in the report.

　　 What factors drive the strength of the renminbi?

French agricultural credit believes that there are three factors to support the strengthening of the renminbi: a record trade surplus, a surge in demand for offshore assets under the premise of gradual liberalization of capital account, and demand for storage and payment intermediaries.

Kowalczyk said: "the main reason why we are optimistic about the prospects of the renminbi is that China's record trade surplus level has rebounded strongly after the fall in last winter and early spring."

The bank expects China's trade surplus to reach a record $377 billion this year, with a surplus of $274 billion in the second half, accounting for 73% of the total annual surplus.

　　 RMB How strong can we go?

Kowalczyk predicts that the yuan will rise to 6 yuan against the US dollar to 1 dollars by the end of the year, which is 2% higher than the current level of exchange rate. "China's huge trade surplus, strong inflow of foreign capital, and internationalization process will further push up the price of RMB foreign exchange to the upper edge of the fluctuation range."

Kowalczyk added: "at the same time, the floating area of the renminbi will continue to rise upward because the Central Bank of China has accepted the renminbi's upward momentum, because strong export growth can match such a rise, and the appreciation of the renminbi can also boost domestic demand."

　　 appreciation The tempo is not too fast.

However, Hamish Pepper, a strategist at Barclays, believes that the renminbi will not continue to go out of the bull market.

Hamish Pepper said: "considering that China's economic growth is weakening, and that the central bank is loosening monetary policy in a directed manner, it seems unreasonable that the RMB can continue to go up in real terms."

The bank expects that the yuan will fall to 6.23 yuan against the US dollar at the end of the year, which will depreciate by 1.6% compared with the current price of 1 yuan. "We assume that the depreciation of the renminbi will become part of the government's economic stimulus," he said.

Barclays Bank last month lowered its economic growth forecast for 2014 to 7.2%, originally 7.4%. The bank expects the Central Bank of China to cut interest rates in the coming months, and will adopt additional directional easing measures to stimulate economic growth.