China'S RMB Depreciation May Be Hard To Avoid

In an interview with the Davos Forum on Friday, Gary Cohn, Goldman Sachs Group, said China might have to devalue its currency to solve the slowdown.

"They may have to take some measures in the next six months," Cohn said. "Will they eventually devalue their currencies? I believe that."

However, Li Yuanchao, vice chairman of the Chinese Communist Party and member of the Political Bureau of the Central Committee of the Communist Party of China, told Bloomberg News in Davos on Thursday that the Chinese government was not prepared to let the renminbi depreciate or let the renminbi be allowed.

Policy.

Wall Street reported that Li Yuanchao had said: "on the one hand, China is trying to expand the RMB market. On the other hand, we must ensure that the currency remains stable.

Exchange rate fluctuations are caused by market forces, and the Chinese government has no intention or policy to devalue.

After the start of this year, the renminbi is on shore.

The unexpected sharp fall in the intermediate price made the RMB exchange rate fluctuate greatly thereafter.

The yuan fell sharply by 1.5% in the first week of January, triggering global market anxiety.

For the future trend of the renminbi, Jiang Jianqing, chairman of ICBC, said during the Davos Forum: "the RMB exchange rate will be more determined by the market in the future.

Therefore, it is normal to see that the exchange rate is fluctuating.

We now see some fluctuations in currencies in other parts of the world and some other countries, and some countries and their central banks have decided to intervene or declare their willingness to intervene, so this is a common measure of the central bank.

It is pointed out that in the past, the link between the RMB and the US dollar did not really reflect the reality of China's foreign trade. When the RMB exchange rate was pegged to a basket of currencies, it could better reflect the real situation.

"Now that the renminbi is determined by a basket of currencies, it will be more stable."

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On Friday, Kuroda Higashihiko, the governor of the Bank of Japan, said that the recent global market turmoil had not seriously affected Japanese business activities, but if turbulence persisted or affected the real economy.

Kuroda Higashihiko said that more stimulus would be launched if needed.

Earlier, Japanese media said the Bank of Japan was "seriously considering" the expansion of easing measures to promote Japanese stocks soared 6% on Friday.

Kuroda Higashihiko, governor of the Bank of Japan, interviewed Bloomberg News in Davos.

He said he did not believe that the recent global market turmoil had obviously affected the activities of Japanese enterprises.

He cautioned, however, that the market is the market, and that the market may eventually affect the real economy, so the Bank of Japan will closely observe.

Kuroda Higashihiko said that excluding the impact of oil prices, Japan's current inflation is at the level of 1%~1.5%.

When energy prices have fallen, inflation expectations are slightly affected, but generally stable.

Kuroda Higashihiko said he did not think China's economy would be hard landing.

On the contrary, he is relatively optimistic about the future of the global economy and believes that there will be no such crisis as Lehman brothers went bankrupt.

However, the future situation needs further observation.

Kuroda Higashihiko said that if the market turmoil continues, it is doomed to affect the economy.

Kuroda Higashihiko said that if the future needs, more stimulus will be launched.

The Bank of Japan has many measures to enhance the intensity of the stimulus plan.

The Bank of Japan also has concerns about further action.

The risk of Japan's expansion of the QQE scale lies in how much more stimulus can play. After all, the biggest risk factor affecting the market is in China.

At present, Japan is facing a series of challenges.

Japanese enterprises and consumers' inflation expectations are down, wage rises are suppressed, stocks are selling, the yen is strong, and oil prices are plunging. The pressure on the Bank of Japan to take further stimulus measures is increasing.

At present, the market is expected to heat up the action taken by the Bank of Japan on the 28~29 January policy meeting.

Since the beginning of the new year, the Japanese stock market has continued to sell, as compared with the global market. The stock index has fallen more than 20% from the recent high point, and has entered a technical bear market.

On Friday, Japanese economic news said the Bank of Japan was "seriously considering" to expand its monetary easing measures, which made it difficult for the central bank to achieve its 2% inflation target because of falling oil prices.

The news prompted the Japanese stock market to soared 6% on that day, creating the largest single day gain in four months.

If the Bank of Japan did not launch stimulus at the January meeting, there would be a cost.

It is expected that this will disappoint investors or trigger a new round of stock market sell-off.

In the next few days, Japan will publish several important economic data, including industrial output report and enterprise output plan report.

These economic data or decisions that affect the January meeting of the Bank of Japan.

Since 2014, Kuroda Higashihiko, governor of the Bank of Japan, has refused to further expand the asset purchase plan.

He believes that the recent CPI growth is mainly due to the decline in oil prices, which is external factors, not because of the influence of the Bank of Japan policy.

The time to achieve 2% inflation target will be changed because of the trend of oil price. It is estimated that the price target will be achieved in the second half of fiscal year 2016.