RMB Will Again Face Depreciation.

On Monday, China announced that exports in March dropped by 15% compared with the same period last year, while analysts expected an increase of 10%.

Exports declined across the board: exports to Japan and exports to the euro area fell by 24.8% and 19.1% respectively.

Goldman made three arguments:

First, China

One of the main reasons for the slowdown is the sharp appreciation of the renminbi against major currencies other than the US dollar.

Since the middle of 2014, the RMB trade weighted exchange rate has risen by 13%.

Second, the Chinese government is eager to promote export growth.

Citing China's Vice Premier Wang Yang, he said the government must take measures to curb the decline of foreign trade as soon as possible and prevent deceleration from a slowdown to a sustained stall.

Third, one reason why the renminbi is not going to depreciate is that

It may be hoped that the renminbi will remain strong so that the renminbi will be included in the International Monetary Fund (IMF) basket of special drawing rights later this year.

But in March, the trade surplus dropped sharply to a near trade balance level, making it easier for China to argue politically that the weakening of the renminbi was not the result of currency manipulation.

Goldman Sachs, the bullish dollar, grasped every opportunity to enhance its assertion that the US dollar would be stronger against the world's major currencies.

According to Goldman Sachs's analysis team, since the brief rebound since mid March, China will probably allow the renminbi to depreciate again.

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Judging from the trend of exchange rate, insiders believe that the process of RMB internationalization requires the RMB to be strong.

Since last year, although the central parity of the RMB against the US dollar has weakened slightly, the real effective exchange rate has maintained an upward trend.

In February, the effective exchange rate of RMB has climbed to a record high of 130.37.

The value of RMB is strong and the attraction of RMB assets is increasing.

Since the beginning of this year, the A share market has continued to attract foreign capital.

Morgan Stanley, Goldman Sachs and other international investment banks have been singing many A shares in the near future.

Offshore funds absorb A shares by means of block trading platforms, Shanghai and Hong Kong through channels.

Some market participants expect that the volume of Shanghai Stock Exchange will expand in the future. Shenzhen Hong Kong Tong will be more open than the initial Shanghai stock exchange system.

Internationalization of RMB can promote cross-border circulation of capital, improve the efficiency of capital market capital operation, and help to improve market activity.

In the process of RMB internationalization, cross-border capital flows are more convenient, and the system is opened so that capital can not only facilitate "walk in" but also facilitate "going out".

The layout of domestic capital has become a hot spot in the recent capital market in Hongkong.

With the capital going south, investors have invested a lot of investment and profit channels.

In the future, with the change of global capital market, the cross border fluctuation of capital will also increase.