Concern About The Depreciation Of RMB Or Offshore Market

During the Spring Festival, the RMB exchange rate in offshore markets basically stabilized, and there was an upward trend as well.

Therefore, before the opening of the Chinese market in the year of the monkey, Zhou Xiaochuan, the governor of the Central Bank of China, broke the silence since the 811 remittance, and believed that there was no basis for the continued depreciation of the RMB. China did not need to expand its exports through the depreciation of the Renminbi. Foreign investors regarded the renminbi as a target of attack, mainly for speculation, but the Chinese government would not allow speculative forces to dominate the market sentiment.

For foreign investors to short the renminbi, it is not for investors to attack directly, but to consider effective use of ammunition and cost minimization.

This will further reform the RMB exchange rate formation mechanism, which in itself will help to deal with market opportunistic forces more flexibly.

If the fixed exchange rate system can't hold back the "steel shield", the flexible exchange rate system will become a "sponge shield", and for excessive speculative forces, it can be offensive and defensive.

That is to say, as far as the current situation is concerned, the offshore RMB market may reflect the real price of the renminbi relative to the controllability and weak market of the onshore RMB market, which is also an important indicator of the RMB trend.

Therefore, the Central Bank of China wants to eliminate the expected depreciation of the renminbi. Not only is the Chinese government going back to attack when it shortens the RMB exchange rate, selling the US dollar and buying the renminbi vigorously, but, of course, it is from the system design to prevent the use of offshore RMB Market to hype the RMB exchange rate and manage the RMB's expectations.

That is to say, the main source of any huge fluctuation in the current RMB exchange rate is offshore market. The Central Bank of China's central bank should focus on the expected management of the offshore RMB market, otherwise, it is impossible to stabilize the RMB exchange rate.

So is China's offshore renminbi market.

Therefore, the Central Bank of China has to balance its relationship with the internationalization of RMB and the choice of RMB exchange rate to stabilize China's economy.

Otherwise, it is not easy to manage RMB expectations well.

This is even more important in the absence of a real reversal in the expectation of RMB depreciation.

The attitude of the PBoC is clearer and clearer.

For Chinese investors, when the renminbi stabilizes, there should be a clear trade-off between what to do and what to do.

From Zhou Xiaochuan's speech, we can see that the RMB exchange rate, China

The game with foreign investors has officially started, which means that the central bank has given foreign investors a game of war.

That is to say, if foreign investors want to make profits through shorting the RMB exchange rate, the Central Bank of China may adopt different ways of coping.

Because before and during the Spring Festival, hedge funds invested billions of dollars in shorting the renminbi.

They predict that in the coming year, the renminbi will face a 30% risk of depreciation.

But after President Zhou Xiaochuan's speech, in February 15th, after the Spring Festival, the offshore renminbi market opened, and the offshore renminbi market rose sharply.

The offshore RMB exchange rate rose to 1.24% against the US dollar at 6.4944, the highest closing price since 2016, when it was 6.4916, or more than 800 points, the largest single day increase since 2005.

Traders in the foreign exchange market believe that the rise in February 15th was mainly due to the adjustment of the US dollar during the Spring Festival and the rise in offshore renminbi.

Offshore RMB against the U.S. dollar, the trend fell from 6.5110 to 6.5354, and finally closed 6.4993.

As for the RMB exchange rate over a month after the fall, the year of the monkey was able to rise sharply, and the increase was the highest since 2005. Although it is related to the factors of the external market during the Spring Festival, such as the stability and rise of the offshore RMB market, the US dollar is weak, but more importantly, it is related to President Zhou Xiaochuan's speech.

Because although there are numerous possible reasons for the depreciation of the RMB exchange rate for Renminbi devaluation, it is uncertain whether these reasons are established in the current international monetary system dominated by a credit currency and a US dollar.

More hope is to make profits through the market expectations of the RMB exchange rate.

Therefore, the Central Bank of China explicitly stated to the market that it did not want the market sentiment of the investors to dominate the RMB exchange rate, and explicitly indicated that it would fight against the short selling of the RMB exchange rate.

This means that the Chinese government's attitude towards the stability of the RMB exchange rate is very clear.

This should be the most important reason for the stabilization of RMB.

However, for the current stabilization of the RMB exchange rate, it is only said that the RMB has not continued.

It is often not enough to stabilize the offshore renminbi market.

Because, for the onshore RMB market, not only the Chinese government has considerable control capability, but also accounts for less than 20% of the total RMB foreign exchange pactions. As long as the offshore RMB market exists, the stabilization of the RMB exchange rate is more important or the main battlefield is the offshore RMB market.

In the offshore renminbi market, more highly leveraged derivatives pactions are traded. Therefore, how to manage the offshore RMB market expectations has become the key to stabilizing the renminbi.

Therefore, the central bank's expectation of RMB management should be placed on the offshore RMB market.