The Depreciation Of The Renminbi Is Still More Advantageous Than The Disadvantages.

After the referendum in Britain, the renminbi is quietly depreciating. This devaluation is not just against the US dollar. The US dollar has more than 6.68 yuan against the central parity, while the RMB exchange rate index CFETS has also fallen by 95. After the pressure of capital outflow is eased, the positive impact of RMB depreciation needs attention. This view is only a market speculation and has not been verified from any official caliber, but it seems logical to the result, even though China has no such initiative. Although the weak external demand limits the dramatic change in exports, the positive impact of the depreciation of the renminbi may be a bright spot in the dull economic and market environment.

After the referendum in Britain, the pound and the euro depreciated against the US dollar, because the renminbi exchange rate pricing mechanism is "closing exchange rate + a basket of currencies", and the depreciation of the RMB against the US dollar is logical. At the same time, the central bank's guidance to the central parity of RMB against the US dollar will help to reduce exchange rate fluctuations against non US currencies. Therefore, the depreciation of the RMB against the US dollar and the RMB exchange rate index can be seen as passive and also as a trend.

However, the devaluation of the renminbi has not triggered any turbulence in the capital market. There are many reasons for this. First, China's financial authorities have stepped up control over China's capital outflow, and the US dollar debt has been largely closed by the end of last year. So there is no such a serious situation that the depreciation of the renminbi triggered massive capital outflow and then put pressure on assets. Secondly, after the European referendum, the risk of the European market increased, while the US dollar hedging property highlighted, but the probability of raising interest rates during the Fed fell during the year, and the market no longer worried about the Fed's interest rate hike. Finally, the Central Bank of China released the desire to moderate the continued devaluation of the renminbi, such as requiring foreign financial institutions to sell long-term foreign exchange transactions with their clients to pay foreign exchange risk reserves, which has limited effect but will enhance the offshore market's short cost of RMB, and the signal significance is more obvious.

In addition to the above reasons, Market expectations They are making corresponding changes. There is a view that the devaluation of the renminbi may be the initiative of the financial authorities. Because the global financial environment is not suitable for the depreciation of the RMB, the depreciation of the RMB will bring more negative effects. After extensive communication between China and the outside world, the pound and the euro depreciated and the loose expectations of the United Kingdom and Europe increased. Take this into account. China's economy The demand for stable growth and depreciation of the renminbi seem to be in line with China's economic interests.

As a result, it has occurred in many developed countries with free exchange rates. depreciation Interest appears in China. Before that, the dilemma of China's foreign exchange and capital outflows was largely due to the fact that the Mundell triangle theory had not been firmly implemented. Now, once capital controls are strengthened, the exchange rate issue will have no impact on asset prices and the financial system. From the external environment, the depreciation of RMB is caused by the current situation. From the internal environment, the capital control in the Mundell triangle is more firmly locked, so the exchange rate and interest rate have gained more freedom.

The benefits of the depreciation of the currency are suppressed. For example, the Research Report of CIC's home appliance industry is optimistic that the RMB devaluation will drive exports to pick up in the second half of the year. The Research Report of the textile and apparel industry of Everbright Securities (601788, stock bar) is expected to depreciate in the short term, which is favorable for export cotton textile enterprises. The market is expected to adapt to the devaluation of the renminbi has experienced an optimistic change.

In May, the RMB exchange rate remained basically stable and the external demand was generally weak, so there was no positive sign of China's export situation in May. In June and July, it is time window to see whether RMB devaluation and exports can improve. If the upcoming June economic data show that exports exceed expectations, the expectation that the depreciation will lead to export improvement will increase, and that the expected performance of export oriented listed companies will rise.