RMB Exchange Rate Will Gradually Stabilize: Where Will The Renminbi Go In The Future?

In recent years, the volatility of the RMB exchange rate has increased, and it has gained unprecedented attention.

From a country's foreign exchange reserves to foreign trade and investment, and then to people's overseas consumption, the influence of exchange rate, a sensitive variable, is everywhere in all aspects of economic life.

Foreign investment banks recently released a research report on the RMB exchange rate, indicating that their expectations for the foreign exchange market have been largely stable compared with the beginning of last year.

UBS has raised the yuan against the US dollar at the end of 2017, rising from 7.2 to 7, and it also moved its forecast from 7.30 to 7.10. Standard Chartered reported that the renminbi would depreciate 3% to the US dollar to 7.06.

In an interview with reporters, Ding Shuang gave his understanding of the problem.

In his view, the RMB exchange rate will remain relatively stable against a basket of currencies this year. There may not be any big moves in the internationalization of RMB, and more basic and foreshadowing work will be done, including clearing and clearing systems, currency swap arrangements, and the regional settlement of the RMB.

Compared to the anchor of a basket of currencies, the market is still more concerned about the trend of the renminbi against the US dollar.

Ding Shuang believes that the Fed's interest rate hike of two times or more this year is a big probability event, so the dollar will continue to strengthen, but the limited space to rise.

Ding explains that the two factors of loose fiscal policy and tight monetary policy will generally support the rise of the US dollar and the yield of US debt in the light of past experience, which will lead to a further appreciation of the US dollar.

But at the same time, he stressed that the strength of the US dollar will have a certain limit rather than a stronger one.

"This involves Trump.

Can it be fully realized? "

The discussion on "withdrawal of foreign capital" became a hot topic again in early 2017 in late 2016, and the Ministry of Commerce made a strong refutation.

In the view of Ding Shuang, it is normal for foreign investment to come in and out. China's absolute value of foreign direct investment has been relatively stable in recent years.

"This is due to the fact that foreign direct investment in China is very selective in recent years. It is more inclined to introduce some industries with industrial structure adjustment, industrial chain rising, acquisition of technology, or inadequate capacity, rather than some polluting or labor-intensive industries."

He further pointed out that foreign direct investment would not rise rapidly, but there was no obvious decline.

In addition to foreign direct investment in China, there is another data worthy of attention, which is China's foreign direct investment.

"I think these two data are more interesting."

Ding Shuang told reporters.

According to the Ministry of commerce data, China's foreign investment decreased 39.4% in December compared with the same period last year, down 35.7% in January.

In the view of Ding Shuang, the "false fire" of early foreign investment is the cause of the current decline in foreign investment.

Recently, the four departments of the development and Reform Commission, the Ministry of Commerce, the people's Bank of China and the foreign exchange bureau are conducting verification of some enterprises' overseas investment projects according to the relevant regulations, so as to promote the sustained and healthy development of China's foreign investment.

Ding Shuang pointed out that it is necessary to strengthen law enforcement in capital management, and the existing policy is not a "one side" tightening.

"Previously, companies were doing more in a panic situation.

Excessive adjustment, especially in mergers and acquisitions. "

He pointed out that with the verification of the authenticity of capital outflows, the growth rate of foreign investment will drop this year, and the possibility of negative growth will not be ruled out in the short term.

He also predicted that there would be some relaxation measures in capital management.

"This is more in terms of inflow, including in the interbank market and bond market, and encouraging foreign investors to invest in China.

When the capital outflow is under control, the outflow will start to open again. "

"Some of them are related to real economic activities, or should they continue to be allowed or encouraged?"

Ding Shuang emphasizes.

In the long run, Ding believes that the goal of China's further opening to the outside world has not changed and will not change the long-term internationalization of the RMB due to short-term capital flows.

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