Ye Tan: The Fall Or Fall Of The Renminbi Is Not Terrible.

At present, the fall of the renminbi seems to be the result of deliberate action.

Over the past two trading days, the yuan has fallen against the US dollar since November 2008, the largest since 2012. The US dollar rose to the highest level since mid 2012, breaking the target's volatility limit.

It's scary? Look at the renminbi rising against the euro for the first time since 2001, to more than 7.

After the outbreak of the global financial crisis in 2008, the RMB and the US dollar remained unmoved in order to avoid the volatility of the RMB exchange rate.

Now that the dollar is riding on the dust, the renminbi must be more concerned with other currencies, so as not to be on the high side with the dollar.

The US economy has improved, and the rise in the US dollar has little to do with it. The US Treasury Secretary, Jacob Lu, stressed at the annual meeting of the world economic forum in Davos, Switzerland: "I will repeat what I have said and all my predecessors have said, that is, a strong dollar is good for the United States, and our economy is much stronger than other economies in the world."

China's RMB can not withstand the risk of being cold at the height. China's economy is at a stage of pformation, equivalent to another molting, which is relatively weak.

For the RMB exchange rate, the people's Bank of China has already taken precautionary measures. In January 23rd, the central bank vice president Pan Gongsheng said that the new version of the QE policy of the central bank plus the trend of normalization of quantitative easing policy in the US would further push the US dollar exchange rate to strengthen, which might bring downward pressure on the RMB to the US dollar exchange rate.

The middle price can partly reflect the intentions of the central bank. In January 26th, the central parity of RMB against the US dollar was 6.1384 yuan, down 42 basis points, a record low since 2015.

The fall in the intermediate price indicates that the central bank has been pleased with the recent RMB exchange rate.

The offshore renminbi in Hongkong was on the spot at 6.2643 yuan early in the morning, a record low of nearly 8 months. Considering that the renminbi has risen sharply, this is a concussion at the top of the RMB price.

In fact, since 2014, the central parity of RMB has fluctuated slightly, until the end of the year, the current trend has not changed.

So long as it's controllable, it's not big.

There is no stall like RMB in rupee.

Risk.

The biggest uncertainty comes from confidence.

Almost all of the people I want to see want to deploy the US dollar assets and convert part of the RMB into US dollars. Some funds are helping entrepreneurs and local governments complete asset allocation plans. They keep the US dollars in foreign markets and try to avoid changing them into Renminbi.

Market risk exists in a small scope.

Bloomberg reported that there are signs that China is trying to push up the RMB exchange rate and curb the outflow of capital that threatens economic growth.

China's central bank's cash flow index on its balance sheet hit its biggest decline since 2003, sending signals from the central bank to sell foreign currency. The central parity rate set by the central bank is also close to the strongest level compared to the market price.

Unlike the past hoped to lower the RMB exchange rate, now the central bank hopes to stabilize the RMB exchange rate, and it can not be too strong against the US dollar, so as not to affect exports, nor to be too weak.

In consideration of

There are still more than US $3 trillion in foreign exchange reserves, and a large number of assets such as European and American government bonds. It is unthinkable that the sharp fall in the renminbi and the domestic debt crisis are unthinkable unless there is an irreversible black swan event in China.

According to the current unemployment rate in the euro area, if we are in the cold war stage, we may have to fight and meet each other.

Now, financial mutual aid and financial challenges have replaced the brutal war of eliminating the flesh and destroying the productive forces, but the economic recovery has become unattainable.

The financial crisis after 2008 is still in the second stage. The first stage is the massive printing of money by the US, the gradual recovery of the economy and the increase in the price of the products. Now, under the tacit approval of Europe and Japan in the United States, the large-scale banknote printing has been self saving, and the US dollar has recovered strongly, making room for recovery for the euro and Japan dollar.

If we want to eliminate production capacity, we always have to pay for it. It may be an ordinary investor in China. It may be a Russian oil tycoon. It may be a country in the Mediterranean.

From this point of view, although the major currencies of the world will not collapse to all markets, the severe shocks are enough to slow down the weaker and natural deficient economies.