Short Term Stabilization Of The Renminbi Is Still Expected To Depreciate.

External storage stabilizes.

Since its peak of $3 trillion and 990 billion in June 2014, its external reserves have only increased for three months since then, and the rest have been decreasing month by month. In December 2015, a record decline of -1079 billion dollars was made under the impact of interest rate hike. The peak value has now fallen by an average of US $39 billion 500 million per month, and the decline in February has narrowed to a mean of 10 billion 200 million US dollars to 3 trillion and 210 billion US dollars this month.

Short term RMB stabilization, interest rate window + exchange rate stabilization period + economic rebound period = two quarter window period; medium term depreciation expectations have not disappeared; the US interest rate hike is still on the road, vigilant against domestic economic rebound after the fall.

No need to worry.

Mental journey.

-10 month, in order to help SDR, the exchange rate formation mechanism reform, the middle price close to the closing price, the expectation of depreciation is as high as 1100 points off the shore exchange rate, and the spot trading volume soared to 50 billion dollars / day. The Mama adopted a direct intervention to maintain the exchange rate at the end of the month. 2 months 10-12 months, the strong intention of maintaining stability was strong. Before the SDR came to the door, no one in the market was against the central bank. The depreciation in the short term was expected to fall. In October, it was even increasing by 11 billion 300 million US dollars; 3) in December - this year's Spring Festival, the SDR basket Plus + US dollar interest rate rose to the ground, the depreciation was expected to return, and in December, it recorded a record drop of the foreign exchange reserve price of the -1079 billion dollar, and the middle price again deviated from the closing price. 1) 811 remittance last year

In the meantime, the central authorities have done three things: to control the central price again, no longer hard to store the reserves, and to start to blow the wind at the same time, to emphasize a peg of exchange rate, to push the CFETS index strongly, and to draw off the offshore RMB's liquidity and to blow up the air and not to be soft. 4) after the Spring Festival, the foreign dollar Dodge is loud and clear, and the domestic strong production capacity is expected to drop sharply. The central authorities have to take the initiative to make a preliminary blow, and begin to try to keep a close watch on a basket of exchange rates. The middle price and the closing price are close again, close to the shore, and the average spot trading volume is 18 billion 700 million dollars / day (basically no spot dry).

Very stable.

The exchange rate will stabilize in the short term, the external interest rate will be reduced, the internal economy will stabilize, and the upper strata will have strong stability.

Externally, the US pigeons are constantly on the rise, although inflation has obviously jumped, but the main factor is the base and the bottom of oil prices. Prices can not yet create a reason for increasing interest rates. At the moment, the probability of raising interest rates is only 57%.

Signs; internally, the balance sheet mismatch adjustment in the private sector is coming to an end, such as the early repayment of foreign debt (the balance of foreign currency debt is only about 500 billion dollars a year, a small amount), and no exchange settlement (foreign investment channels are not smooth enough, and overseas yields are limited), and the US dollar deposits are fixed at 0.5% yuan a year, 1.5% yuan; the US dollar financing 1.5%-2%, the RMB's financial management is about 4.2%, the US dollar absolute income is very low, the RMB's continuous depreciation has not been seen recently, and the swarming of foreign exchange has been calm. In the upper level, the G20 meeting of the US in the 6-9 month of the US general election will be cautious before September. Internally, concerns about strong capacity liquidation at the beginning of the year have been eliminated. High frequency data such as credit, traditional industrial prices, regulatory profits, etc. so far this year show a weak stabilization.

The medium term exchange rate still has pressure points, and there is still room for appreciation in the long run.

Internally, the expectation of depreciation is still there. The downward pressure on economic structure is still not seen. The downward pressure on the economic structure is still in place. It is likely that the rebound has not reversed. In the second half of the year, it is not clear yet. On the outside, the US dollar increases interest rate stops but does not change direction. Compared with the rest of the emerging market currencies, the renminbi has been passively following the US dollar appreciation too much in the past. Now the global purchasing power is too strong. The overseas huge M & A and the monthly tourism consumption data have all been corroborated by this, and there is still some adjustment pressure in the medium term.

In the long run, the hardware fundamentals of "high growth rate + big surplus + high interest rate + high productivity growth + strong intervention capability" are good, and there is room for appreciation.