Do Not Wait For The RMB Will Not Depreciate Greatly.

Against the backdrop of Asian currency devaluation, it is not surprising that markets expect the renminbi to join the devaluation army.

Since August 2014, the RMB's real exchange rate has appreciated by 6%.

Among them, the depreciation of the yen, euro, won and rouble is the biggest push.

And the renminbi is strong.

The US dollar only depreciated slightly by 0.5%.

However, French Societe Generale sneered at the expectation that the renminbi would depreciate significantly. The bank said that China's policymakers would not tolerate more than 5% depreciation of the renminbi.

The reasons are as follows.

First, history has proved that even in a time of financial crisis, China has no precedent for devaluing the renminbi.

Whether it is

The financial crisis is still a subprime crisis in the United States.

In fact, from 2008 to March 2009, it was the peak time of US finance, so Chinese exports suffered a severe winter and employment decreased significantly.

Against this background, the renminbi has appreciated 8.5% against the US dollar.

As the US economy stabilizes steadily, China's exports are not rapidly losing competitiveness because of the relatively expensive Renminbi.

This means that China has not pressed the urgency of the renminbi.

In addition, China is also at a loss for capital outflows.

The cause of domestic liquidity has made China slow progress in opening capital account.

If the yuan depreciated sharply, it will lead to large capital outflow, which will lead to a huge downside risk to China's overall economy.

From the point of view of maintaining stability, there is also a lack of evidence for the depreciation of the RMB.

Lastly, the Chinese government is pushing for structural reform.

The sudden sharp depreciation of the local currency may lead to the impact of reform efforts.

This is also related to the credibility of the government, so the decision-making level will not take such risks.