Central Bank Officials To Boost The Renminbi Spot Exchange Rate Appreciation

Data from the China foreign exchange trading center showed that yesterday, the RMB exchange rate against the US dollar in the inter-bank foreign exchange market was 6.1528, down 3 basis points from the previous trading day, still 15 basis points from 6.1543 in March 3rd.

The daily economic news reporter noted that although the dollar index rose overnight and hit a new high of 11 and a half years, the central parity of the RMB against the US dollar failed to break through the nearly four month new point this Tuesday.

March 4th, international

In the market, the US dollar rose significantly to the major currencies such as the euro, and the US dollar index broke through the 96 pass, hitting a high level since September 2003 and ending up 0.6% to 95.95 at the end of the session.

In March 4th, Yi Gang said that one country's exchange rate is one of the most important barometers for the country's economic and financial situation. Although the Chinese economy in the three period has already entered a new normal, the Chinese economy is still stable, and the real exchange rate of RMB is still strong.

"We note that the central parity has been down in recent days, but this should not be the central bank's intention to guide the depreciation of the exchange rate, but more importantly, to respond to the strong US dollar in the international market.

If the exchange rate is cut sharply at the same time as the interest rate is lowered, this may cause unnecessary panic, and the monetary authorities should avoid such a situation.

Liu Dongliang told the daily economic news reporter.

The reporter noted that in the 2015 government work report, the relevant contents of RMB internationalization were highlighted. It was said that "steadily realizing RMB capital account convertibility, expanding the international use of RMB, accelerating the construction of RMB cross-border payment system, improving the RMB global settlement service system, launching pilot projects for overseas investment of individual investors, and timely launching the Shenzhen Hong Kong pilot". In addition, "maintaining the RMB exchange rate at a reasonable and balanced level and enhancing the two-way floating elasticity of the RMB exchange rate".

An analyst told the daily economic news reporter that "the use of RMB in the world, including becoming the reserve currency of more countries, will help stabilize the value of the currency exchange rate. At the same time, if the RMB is to further internationalize, it needs to maintain the stability of the exchange rate in order to gain more confidence."

According to data released by SWIFT, the yuan has surpassed Canadian dollar in December 2014 as the fifth most commonly used payment currency in the world.

The proportion of Renminbi denominated pactions has risen to 2.2% of the record high.

The US dollar, the euro, the pound and the yen are still the four most commonly used payment currencies, accounting for 44.6%, 28.3%, 7.9% and 2.7% respectively.

CICC's research report pointed out that the rate cut itself is not the root cause of the recent devaluation of the RMB, and the lag of China's monetary policy adjustment is the main reason.

If China adjusts its monetary policy in a timely manner and gives the market a clear forward-looking guidance like India, then China's interest rate cut should push up the exchange rate as India does.

On the basis of fundamentals, there will still be a strong appreciation pressure for the renminbi in the future. It is expected that the current account surplus will increase to 3% from GDP last year, which accounts for GDP.