Interest Rate Cuts Stimulate The RMB Exchange Rate Nearly 8 Months High

　　 Middle price A eight month high

In November 24th, the first trading day after the interest rate cut, the yuan opened 6.1280 points against the US dollar, which was 31 basis points lower than the closing price of the previous trading day, and then continued to depreciate along the way. Finally, it closed at 6.1417 points, dropping 168 basis points throughout the day, setting a new low in September this year.

Although the spot exchange rate fell sharply on the same day, the central parity of the US dollar remained relatively stable. Data from the China foreign exchange trading center showed that in November 24th, the central parity of RMB against the US dollar was 6.1420, which only depreciated by 33 basis points from the previous trading day, indicating that the central parity of RMB was adjusted by the authorities. exchange rate The intention of maintaining relative stability is obvious.

Affected by this, RMB pairs in November 25th and 26th. dollar The middle price went up, and the two transactions rose by 66 basis points, rising to the highest level since 20 in March this year. By the end of November 26th, the spot exchange rate of RMB against the US dollar was 24 basis points higher than that of the previous trading day.

Data from the China Foreign Exchange Trading Center show that in November 27th, the central parity of RMB against the US dollar reached 34 basis points to 6.1320, rising for three consecutive trading days, hitting a 8 month high since March 14th of this year. In November 27th, the spot exchange rate of RMB against the US dollar opened at 6.1377, and appreciated by 12 basis points, although it was still lower than the level before the rate cut, but it also rose for the three consecutive trading day.

In this regard, market traders pointed out that in recent three trading days, the central parity of RMB against the US dollar strengthened, although it was related to the continuous decline of the overnight dollar, but relative to the US dollar index high consolidation and the low spot exchange rate of RMB against the US dollar, the strong characteristics of the RMB's innovation in the US dollar showed that the management intends to intervene in the market expectations after the interest rate cut, so as to prevent the rapid rise of the RMB depreciation expectation.

　　 Stage appreciation exceeds 10%

This year, the US dollar index has risen sharply over the past 7 years, ushered in a very rare trend of strong rise in recent years. According to statistics from reporters, since the dollar index rose in July 1st this year from 79.740 points, it hit 88.463 points in November 24th, has hit a new high since the end of May 2010, with the largest increase of nearly 11% during the period. At the same time, the currencies of other major developed economies such as Europe, Japan and Australia have weakened rapidly in recent months. In addition, the currencies of emerging markets such as Russia, India and Brazil also suffered a sharp depreciation due to the continued strength of the US dollar.

However, the reporter found that the RMB exchange rate has been greatly strengthened in the global economy of many economies. According to statistics, the largest period of appreciation has exceeded 1% since the appreciation of the RMB against the US dollar in early July. Even at the end of last week, the central bank launched the easing of interest rate cuts, but the appreciation of the RMB against the US dollar has not stopped. Meanwhile, in the second half of this year, the total appreciation rate of RMB against the major non US currencies, such as the euro, yen and Australian dollar, has generally reached 10%, and its strong feature is even more obvious.

As we all know, in general, the RMB exchange rate is negatively correlated with the US dollar index, that is, the appreciation of the US dollar, the depreciation of the RMB, the depreciation of the US dollar and the appreciation of the renminbi. Why does the RMB exchange rate against the US dollar go up sharply in the case of rising US dollar index?

Market traders point out that there is a "managed floating exchange rate system" in China at present. In addition, if the RMB depreciates sharply, it will probably lead to the rapid withdrawal of the hot money which has entered the country in the past, which will bring some financial risks to the Chinese economy. Especially in the current environment of devaluation of economies such as Europe and Japan, the expectation of RMB devaluation is strong. Once the long term depreciation channel of RMB is opened, the economic and financial risks brought about by the withdrawal of hot money will increase. Therefore, the central bank will ensure that the exchange rate does not depreciate, and at most it is only a moderate callback. In general, the RMB exchange rate will continue to persist, or even exclude the possibility of further appreciation.