The offshore RMB exchange rate breaks the "7", and should pay attention to the change of the RMB to a basket of currencies

Reporters Hu Tianzheng and Tang Jing Beijing reports from 21st Century Business Herald

Following a week after wandering around 6.97, around 19:00 on September 15, Beijing time, the offshore RMB's exchange rate on the US dollar fell below the "7" mark and the lowest depreciated to 7.0183. During the same period, the exchange rate of the US dollar on the shore also approached the "7" mark, with a minimum depreciation to 6.9962.

Earlier, on the morning of September 7, the offshore RMB fell below the 6.99 mark, with a minimum of 6.9946.

For a long time, there has been a view that "7.0" is a more important point. It is also worried that if it breaks through this point, whether it will cause depreciation expectations to gather, which will cause the RMB out of the trend of the US dollar index and rapid depreciation.

However, the 21st Century Economic Herald reporter's digital analysts said that "7" is just a psychological barrier, and there is actually not much essential significance.

There is not much practical significance of the "7" mark

Wang Qing, chief macro analyst of Dongfang Jincheng, pointed out that in different markets and macroeconomic backgrounds, the meaning of 7.0 points is different. Specific backgrounds include: what level of the US dollar index is in the process of "breaking 7" in the RMB exchange rate; where the three major RMB exchange rate indexes are at the position, and what state is basically in the face of the domestic and foreign economies.

Wang Qing said that compared with the previous round of breaking 7, the current US dollar index is high, and the three major RMB exchange rate indexes are about 10%higher than before. "It is also broken 7, but now the RMB trend is obviously stronger."

From August 2019 to July 2020, the RMB exchange rate against the US dollar continued to fluctuate around 7.0.

Xie Yaxuan, chief economist of China Merchants Securities, told the 21st Century Business Herald reporter that the so -called "7" psychological pass actually refers to the bilateral exchange rate of the RMB against the US dollar.

Xie Yaxuan said that for the Chinese economy itself, in terms of essence, it is not much different from the RMB exchange rate of 6.99 or 7.01. Compared with the bilateral exchange rate of the RMB against the US dollar, the RMB is more important to the trend of a basket of currencies. As a result, while paying attention to the bilateral exchange rate of the RMB against the US dollar, we must pay more attention to the trend of the RMB to a basket of currencies.

Zhang Jing, the person in charge of the fixed income team of CITIC Futures Research Institute, said in an interview with the 21st Century Business Herald that the depreciation of the RMB in this round began on the night of August 12, Beijing time. It is not as expected. "The trend of the US dollar against the RMB and the US dollar index is basically the same, and the CFETS RMB exchange rate is relatively stable." Zhang Jing said, implying that this was a "follow -up" depreciation of the RMB.

Zhang Jing believes that compared to August 5, 2019, the main difference between RMB "breaking 7" is that one is the more radical Fed and a stronger dollar; the other is a more rational market expectation; The third is the pressure of greater capital outflow.

Zhang Jing emphasized that since the depreciation of the renminbi on August 12 this year, the option price has declined, representing the relative rationality of the market emotions, and believes that there will be more room for appreciation after the renminbi stage depreciation is in place. At the same time, other observation indicators representing market emotions such as 1Y NDF point and offshore-the price difference between the RMB on the shore also releases the same rational signal.

A macro researcher at the Galaxy Futures told the 21st Century Business Herald that after 7.2 is the next important observation point. Because the central bank twice in September 2019 and May 2020 twice around 7.2 yuan, decisively enabled measures such as counter -cyclical factors to reverse the decline of the RMB against the US dollar.

He said that the central bank said many years ago that the exchange rate of the US dollar against the RMB has already increased the automatic adjustment role of the RMB exchange rate to play a regulating macroeconomic and international revenue and expenditure.

The above -mentioned macro researcher said that in recent years, the central bank has also adjusted the reasonable and balanced level and fluctuation range. For example, before 2018, the central bank's target management area was 6.6 yuan, between 6.3 yuan and 6.9. He judged that RMB surrounded 6.7, fluctuating between 6.3 yuan and 7.2 yuan, and was one of the manifestations of management floating.

Gradually dilute the attention of bilateral exchange rates

Since the beginning of this year, the central price of the RMB has fallen by 8.47%. The RMB -US dollar exchange rate and offshore RMB to the US dollar exchange rate fell more than 9.3%and 9.6%.

On August 15, the exchange rate of the RMB against the US dollar began to decline sharply, and fell below the 6.94 mark on September 5th. On the evening of the day, the central bank announced that starting from September 15, 2022, the reserves of foreign exchange deposits of financial institutions have been reduced. A percentage point, that is, the foreign exchange deposit reserve ratio is reduced from the current 8%to 6%.

Xie Yaxuan reminded that no matter from the perspective of diversification of foreign economic exchanges, or paying attention to the RMB exchange rate in the economic sense, they should gradually dilute the attention of the bilateral exchange rate of the RMB against the US dollar and pay attention to the changes and strengths of the RMB to a basket of currencies.

Wang Qing emphasized that as far as the current situation of the global exchange market is concerned, breaking 7 is not an effective standard for measuring the strength of the RMB exchange rate. What is really important is whether the three major RMB exchange rate index can maintain basic stability.

According to China Currency Network data, on September 15, the CFETS RMB exchange rate index was 102.1; the BIS currency basket RMB exchange rate index was 107.46; the SDR currency basket RMB exchange rate index was 99.88, a stable level. Wang Tao, the chief managing director and chief Chinese economist of UBS Asian Economic Research, told reporters that the depreciation of the RMB is mainly affected by a strong US dollar. Essence

"The core of the steady exchange rate is to stabilize capital flows. The central bank also has rich exchange rate policy tools to use." Zhang Jing added that if the foreign exchange risk reserve ratio is raised, the foreign exchange deposit reserve ratio is continued to regulate the full -caliber cross -border financing Macro -prudential adjustment parameters, regulate domestic enterprises' overseas lending macro -prudential adjustment coefficients, etc.

In addition, Wang Qing said that if the RMB exchange rate is abnormally fluctuated from the US dollar index next, the central bank can also announce the restart of the inverse cycle factor in time, increase the scale of central ticket issuance of the offshore market, and strengthen the liquidity of cross -border funds. Management and other measures. Regulatory levels can also further strengthen market communication, guide market expectations, and prevent the "herd effects" caused by the periodic behavior of the foreign exchange market.

Looking forward to the future, Wang Qing believes that due to the Federal Reserve ’s tightening rhythm, it will still be significantly ahead of factors such as Europe and the Japanese Central Bank. Before the end of the year, the US dollar may still maintain a strong stage, and there may still be a certain depreciation pressure on the RMB against the US dollar. However, with the increase in domestic economic restoration and the situation of China's international revenue and expenditure, it is expected to maintain a surplus situation. It is difficult for the RMB depreciation expectations to effectively gather. It is expected that the RMB will remain similar to the US dollar index.

Wang Tao is not worried that the renminbi will depreciate sharply. She said that China's frequent project surplus and trade surplus are still considerable, and they have good control ability in terms of capital outflows. In the current situation of the overall economic downward pressure in China, the appropriate depreciation of the RMB in the controllable range is conducive to export.

(Coordinating: Ma Chunyuan)

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