Yang Delong: Decrease foreign exchange deposits to release 19 billion US dollars of foreign exchange to reduce the pressure of RMB depreciation

Zhongxin Jingwei September 5th. Question: Decrease foreign exchange deposits to release 19 billion US dollars of foreign exchange to reduce the pressure of RMB depreciation

Author Yang Delong Qianhai Open Source Fund Chief Economist

On September 5th, in order to enhance the ability of foreign exchange funds for financial institutions, the People's Bank of China decided that starting from September 15, 2022, the foreign exchange deposit reserve ratio of financial institutions has been reduced by 2 percentage points, that is, the foreign exchange deposit reserve ratio is reduced by the current 8%. To 6%. Foreign exchange deposit reserve rate refers to the ratio of foreign exchange deposits reserve to the People's Bank of China to deposit foreign exchange deposits of the People's Bank of China to its absorption of foreign exchange deposits. According to the financial data released by the central bank, as of the end of July, my country's foreign exchange deposits were US $ 953.7 billion. The reduction was 2 percentage points. It is equivalent to financial institutions to increase the capacity of $ 19 billion in foreign exchange application capabilities, which is conducive to boosting the trend of the RMB exchange rate and reducing the yuan Declars depreciation pressure.

On September 5th, the RMB against the US dollar at 16:30 was reported at 6.9366, a 338 basis point from the previous trading day, and more of the offshore renminbi that reflects international investors' expectations fell below the 6.95 mark in the US dollar. A new low since August 2020.

Liu Guoqiang, deputy governor of the People's Bank of China, introduced the continuation policy and measures to introduce the economy of a stable economy today, which was held by the National New Office. It is a long -term trend. But in the short term, two -way fluctuations are a normal state, with two -way fluctuations, and there will be no 'unilateral market', but the point of the exchange rate is not allowed. Basic stability is what we like to hear, we also have the strength support. I don't think there will be any accidents or an accident. "After the above statement, the central bank has lowered the foreign exchange deposit reserve ratio of financial institutions for the second year, and the stability of the RMB exchange rate is obvious.

Recently, due to the continuous soaring in the US dollar index, non -US currency has continued to adjust, especially in some developing countries currency depreciation. Affected by the US dollar index in nearly 20 years, a certain depreciation of the exchange rate on the shore and offshore RMB against the US dollar has recently been depreciated. Double refreshing two -year low, leading to some people who expressed concern about the prospects of the renminbi. I think China has enough strength to deal with various risks, so that the RMB exchange rate is at a reasonable and balanced level. In terms of the capital market, the northbound funds bought 7.9 billion yuan throughout the day, and a total of 12.7 billion yuan was increased in August, indicating that foreign capital's attitude towards the current A -share market was not affected by the depreciation of the RMB.

The Fed has raised interest rates four times this year, mainly to cope with the highest level of inflation in 40 years. In the March, May, June, and July, the rate hikes were 25, 50, 75, and 75 basis points, which promoted the continuous rise in the US dollar index. At the Jackson Hall Central Bank Annual Conference held last Friday, Fed Chairman Powell once again expressed the eagle position that continues to raise interest rates to cope with inflation, which also means that the US dollar may continue to strengthen and affect the trend of non -US currencies Essence Of course, the price of the Federal Reserve ’s interest rate hike is very large, which has a great impact on the recovery of the US economy. Due to the increase in the benchmark interest rates and the shortage of global energy and food supply, the growth rate of the US economy has increased in the first half of the year. If continuing to raise interest rate hikes may further promote the US economy falling into a state of stagnation, that is, economic growth has stagnated, inflation is high, and may even slide into decline. Therefore, the Fed's interest rate hike is actually helpless. For the past two years A correction of excessive easing monetary policy is also to suppress asset bubbles by recycling liquidity.

On August 15th, the central bank lowered the interim loan convenience and the loan market quotation interest rate LPR, which showed that my country's monetary policy still maintained the rhythm of me. The trend of the Sino -US monetary policy continued to differentiate, which is also a reason for the depreciation of the RMB.

The main problem facing the United States is anti -inflation, and the main problem that my country is now facing is steady growth, which also means that the short -term fluctuations in RMB are unavoidable. However, in the long run, the RMB exchange rate will remain at a reasonable level. With the gradual implementation of stable economic policies and the implementation of the continuation policy, the trend of economic growth will be further consolidated. This is the fundamental support for the renminbi. From the perspective of data, the RMB assets still have a relatively large attraction. The latest special withdrawal rights of the IMF IMF of the International Monetary Fund officially came into effect in August. The further improvement of the status in international reserve currency also shows the attraction of RMB assets to international funds. Data show that in July, foreign institutional investors bought RMB 518.8 billion in RMB bonds, sold 512.3 billion yuan, and bought 6.6 billion yuan in net. Since August, overseas investors have bought Chinese securities, including stocks and bonds, which also reflects the long -term prospects of China's economy.

The impact of short -term exchange rate fluctuations is limited, and Chinese assets still have relatively large investment attractiveness to foreign capital.A number of foreign investment banks issued a report saying that investors can regard the recent low valuations of the Chinese stock market as an opportunity to further increase their warehouses, optimistic about the performance of the stock market after the economic recovery, and the valuation of the Chinese stock market is more attractive.The person in charge of the Foreign Exchange Bureau said that the current main body of my country's foreign exchange market is more rational and maintains the transaction model of "settlement at every high exchange".The stable exchange rate is expected to help the RMB exchange rate keep basically stable at a reasonable balance. Generally speaking, the short -term depreciation of the RMB exchange rate is conducive to stimulating exports.As long as the renminbi exchange rate maintains the interval to fluctuate, it should not have a great impact on the economic recovery.(Zhongxin Jingwei APP) (The point of view in the article is for reference only, does not constitute investment suggestions, investment is risky, and you need to be cautious when entering the market.)

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