RMB's Largest Weekly Decline Since March

As trade and inflation data exacerbate the market's concern about the slowdown in China's second largest economy, this week (December 8th -12) the renminbi will likely have its biggest weekly decline since March.

Data released this week show that export growth and consumer price inflation are lower than economists' estimates. Industrial producer prices have increased and imports have dropped unexpectedly. HSBC Holdings expects the Central Bank of China to further ease its monetary policy and reduce its forecast against the US dollar at the end of 2015 from 6.10 to 6.22. China's central bank cut interest rates for the first time in two years in November.

Li Huifen, chief executive of Shide wealth management in Hongkong, said that the figures released this week did not provide any signs of economic recovery, and that worries about China's economy were heating up again, and the RMB may continue to decline in the near future.

Data from China foreign exchange trading center showed that the yuan fell 0.67% to 6.1928 this week, the largest in five days as of March 21st. Decline 。 The yuan fell 0.04% against the dollar today, a 0.25% difference from the five month low of 6.2064 hit in December 9th.

The Central Bank of China this week adjusted the central parity of RMB to 0.31%, the biggest weekly gain in a month. The median price was set at 6.1153 yesterday, the highest since February 20th, which was 0.05% lower today. The RMB exchange rate in the Shanghai market is 1.2% lower than the middle price, the largest since June. A discount Degree.

　　 Li Hui Fen The central bank hopes to release such information abroad, that is, although the economy slows down, the bank does not support the depreciation of the renminbi. The deviation between the spot rate and the trend of the middle price indicates that the role of the market is enhanced.

Bloomberg data show offshore renminbi against the US dollar fell 0.04% in Hongkong to 6.1981, expanding to 0.62% this week, the biggest weekly decline since March. In 12 months, the Yuan's exchange rate declined by 0.1% to 6.3202 today, which is 2% lower than the spot exchange rate in Shanghai.

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In the overseas non deliverable forward foreign exchange (NDF) market, the US dollar / Renminbi one year variety is newly reported at 6.3040/80, ending on Wednesday at 6.3005. The latest offshore dollar / RMB spot report in Hongkong was 6.1778/98, and the last trading day was 6.1790.

Although the main reason for pushing up the central parity price for fifth consecutive days is the pullback of the international dollar index overnight, the intermediate price has hit a new high since February 20th. It also shows that the central bank intends to curb the sharp depreciation of the renminbi. "The balance of foreign exchange buying within the whole day is not clear, and there is no single direction of bulk strength."

Traders also said that the recent changes in the passenger market, the market is more cautious, it is difficult to determine the direction at the moment, "but the depreciation of the space should not be too large, the late focus on the offshore dollar index and the trend of CNH." In the first two days, the market liquidity is poor, the spot price has been greatly oscillating, the quotation area is very broad, and also reflects the market's entanglement with the market direction.

The process of RMB internationalization has gone through 5 years. The process of 2014 accelerated obviously, and the movements were frequent, and made breakthroughs in the investment products and the way to reserve currency. At the same time, significant progress was made in the construction of offshore RMB market. Experts say that while the internationalization of the RMB is fast running, we must guard against the financial risks brought about by cross-border capital flows.

Shanghai and Hong Kong officially opened in November 2014. Shanghai and Hong Kong pass is regarded as an important measure for China to accelerate the internationalization of RMB. It not only increases the investment channels of overseas RMB, but also improves the liquidity of offshore RMB in Hongkong, and provides support for the RMB's long-term competitiveness as an international currency.