After The Central Bank Cut Interest Rates, The US Dollar Continues To Keep The Middle Price Under Pressure.

The spot exchange rate of RMB reversed the gap gap in the afternoon of Wednesday (December 3rd), and it dropped again in early trading. After that, the Central Bank of China raised the middle price level of the US dollar to the RMB exchange rate again, making the RMB exchange rate further pressurized. Although the early data show that the overall activity of China's service industry is still stable, this does not stop investors from continuing to see the renminbi's willingness to exchange prices.

US dollar to RMB Exchange rate In the morning, the highest value rose to 6.1532 in the morning, and recovered 6.1503 on Tuesday (December 2nd). The Central Bank of China has raised the central parity of the US dollar to RMB again by 51 basis points, from 6.1325 to 6.1376 on Tuesday, because overnight. US dollar index Once again, a strong upward trend has set a new high of four years.

　　 Shanghai A bank dealer pointed out that the RMB exchange rate has continued downward trend recently, because the market is still digesting the impact of the unexpected central bank's interest rate cut at the end of last month. Meanwhile, the central bank's timely adjustment of the intermediate price also helped to push forward the RMB spot exchange rate downwards. On the offshore market, the US dollar against the renminbi has no deliverable forward 6.2670/2720 for a year, compared with the 6.2620/40 on Tuesday.

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"Lowering interest rates, lowering the standards and devaluing the renminbi may be a way to increase economic growth next year." Yu Yu, chief economist of Orient Securities, endorsed the views of Lu commissar on the forum of Confucianism.

However, there is opposition to the devaluation of the renminbi. Craig Chen, director of foreign exchange strategy in the Asia Pacific region of Nomura Securities, said in his comments on interest rate cuts that the continued weakening of the renminbi will not only attract pressure from international public opinion, but also be unfavorable to the process of RMB internationalization and the goal of RMB becoming the international reserve currency. "But in fact, the depreciation of the renminbi does not mean beggar thy neighbour, but reflects the basic situation of China's economy." Lu commissar pointed out.

Another view, which is not optimistic about the depreciation of the renminbi, is that the main reason for the current slowdown is domestic demand rather than export. Zhao Qingming, chief macroeconomic researcher at the Beijing Institute of financial derivatives, believes that in the current weakening of the euro and yen, the Renminbi should also weaken in theory, which is conducive to the real economy. However, the impact of the exchange rate on exports is often overestimated, and it is not advisable to use depreciation to maintain competitiveness.

In view of the view that economic growth is dependent on domestic demand rather than export, Lu commissar said that in the past few decades, the governments of developed countries generally regarded domestic demand as the main driving force for economic growth, but the path of globalization has driven these governments to gradually shift their attention to the competitiveness of the domestic economy, that is, the extent to which a country can export its products abroad.

In general, depreciation is beneficial to exports, and can also enhance the growth of manufacturing and service industries.

In March this year, the people's Bank of China "Research on the measurement of RMB effective real exchange rate and exchange rate imbalance" shows that in recent years, the RMB exchange rate imbalance began to show a small fluctuation around zero value, indicating that the exchange rate is approaching equilibrium. We should improve the elasticity of nominal exchange rate of RMB, change the expectation of unilateral appreciation thoroughly, avoid excessive arbitrage capital flow and new current account imbalance.

Yu Yongding, a member of the former central bank's monetary policy committee, told reporters: "let the market decide the exchange rate. The central bank will no longer intervene in the foreign exchange market under normal circumstances, inhibit the cross-border capital flows of short-term capital, and accelerate the development of financial hedging tools. These three points should be the principle of dealing with the current exchange rate.