How can I deal with the "7" of the RMB exchange rate?

After a lapse of more than two years, the exchange rate of the RMB to the US dollar again broke through the "7" mark. On September 16, the exchange rate of the US dollar on the shore fell below the "7". Yesterday, the exchange rate of the offshore RMB to the US dollar had broken the "7".

From August 15 to today's "7", offshore RMB's exchange rate against the US dollar fell 3.88%, and the RMB against the US dollar fell more than 3.9%. Why did the RMB exchange rate break the "7" at this time, and how much impact is the impact of "7" on the international income and expenditure and financial markets. How should enterprises and individuals respond? The reporter sorted out 8 tips as follows:

1. Why does the RMB devaluation and break the "7"?

Regarding the reasons for the lower RMB, Liu Guoqiang, vice president of the central bank, gave an interpretation at a blower at the New National Office on September 5. He said that recently, the United States has increased money policy adjustments. Under the background of the US dollar appreciation, other reserve currencies in the SDR basket have greatly depreciated against the US dollar, but the depreciation of the RMB is the smallest compared to other non -US dollar currencies. In the SDR currency basket, the US dollar appreciates and the RMB has also appreciated, but the appreciation of the US dollar is greater than the appreciation of the RMB. The RMB has not depreciated.

The point of view of the comprehensive research institution has declined since the this round of RMB opened on August 15th. In addition to the impact of the strong US dollar, it has also been developed by factors such as the deepening of the China -US monetary policy differentiation and the recent pressure of economic growth in China.

2. How do you think of the RMB exchange rate to break the "7" on the US dollar?

This time the exchange rate of the RMB to the US dollar broke the "7" is the first time since August 2020. However, many institutions pointed out in the report that, in the context of strong US dollars, the key point of "7" is not so important, and the fluctuations of the exchange rate under the complex and changing international situation should be rationally viewed.

"The current weakening of the RMB exchange rate is overwhelming the influence of the Federal Reserve's high inflation and the European energy crisis. In the context of a strong US dollar, the RMB may still be under pressure, but the RMB exchange rate is no more Points. "CITIC Securities pointed out.

Regarding the highly watched point of "7", the central bank gave an metaphor for the "reservoir" on August 5, 2019 (the first time the RMB exchange rate on the day of the RMB for the first time in 11 years), that is, the "RMB exchange rate rate" Breaking '7', this '7' is not age, I can't go back in the past, nor is it a dam. Once it is broken, it will cause a thousand miles; '7' is more like the water level of the reservoir. During the dry period, it will fall again, and it is normal to rise and fall.

3. How to get the RMB exchange rate in the next step?

When talking about the future trend of the RMB in the same game, Liu Guoqiang said: "The long -term trend of the RMB should be clear, and the recognition of the RMB in the future will continue to increase. By -directional fluctuations will not appear 'unilateral markets', but the point of the exchange rate is not allowed. Do not bet on a certain point. Reasonable and balanced, basic stability is what we like to see, we also have the strength to support it. I think it will not. In the accident, no accident is allowed. "

The view of the comprehensive institution, in the context of the domestic economy facing downward pressure, the RMB exchange rate is still depreciating and pressured by depreciation. The subsequent RMB exchange rate mainly depends on the US dollar index.

CITIC Securities pointed out that in the context of a strong US dollar, the RMB will still be under pressure in the short term. Banks and sales are still in a surplus, stable international revenue and expenditure have not changed, and the basic support of the renminbi is still there.

Fourth, how does breaking "7" affect capital flow?

"At present, the Chinese foreign exchange market is operating normally, the flow of cross -border funds is orderly, and it is affected by the overflowing effect of US monetary policy, but the impact can be controlled." Liu Guoqiang said at a blower at the New National Office.

The point of view of the comprehensive institution, the impact of this round of depreciation on capital flow is not strong.

"Using exchange rate adjustment or allowing the exchange rate depreciation to relieve part of the endogenous tightening pressure, it is a strategy of right. As long as the exchange rate of the RMB against a basket of currencies remains stable, the RMB 'break 7' will not cause capital outflow, or the RMB exchange rate 'loss The panic of anchor ', "Huatai Securities pointed out.

CITIC Investment pointed out that capital flows judged from indicators such as bond markets, stock markets, and FDIs will not be obviously weakened. This round of depreciation may drive some capital outflows, especially considering the background of Federal Reserve's expectations of fermentation, but the number of short -term trading funds has been limited, and the exchange rate of the RMB against CFETS has not changed. The storage pressure is relatively limited.

The latest data shows that in the comprehensive role of factors such as exchange rate converts and asset price changes, the scale of foreign exchange reserves in August decreased by 49.2 billion US dollars from the end of July. Faced with the fierce fluctuations in the international financial market, the Foreign Exchange Bureau emphasized that "my country's efficient overall overall overall epidemic prevention and control and economic and social development, in -depth implementation of a policy of stabilizing the economy, and maintaining economic operations in a reasonable range, which is conducive to the overall stability of the scale of foreign exchange reserves."

5. What are the central bank toolboxes?

Since the "811" exchange reform, the central bank has continuously enriched its own regulatory toolbox in response to the fluctuation of exchange rate fluctuations.

In addition to the foreign exchange deposit reserve ratio (April and September 5), which has been used twice this year, the adjustment tool that has not been taken out in the central bank toolbox also includes the long -term sales of the Chinese version of "Tobin Tax" The foreign exchange risk reserve ratio of the exchange business (currently 0, up to 20%), cross -border financing macro -prudential adjustment parameters, and adjustment of parameters of counter -cyclical factors medium -cycle factor in the middle price formation mechanism of the renminbi, and so on. In addition, the central bank has used to tighten the depreciation of the exchange rate through operations such as tightening RMB liquidity in the offshore market in the past. "The current fluctuation range of the RMB exchange rate is still within the policy orientation, mainly due to the pressure of stable growth and employment to protect employment than external balance. It does not rule out the introduction of policy adjustment tools such as risk reserves and counter -cyclical factors again.

6. How should residents and enterprises deal with?

The RMB has broken the "7" to the US dollar. How does it affect the common people?

The central bank had previously given answers when the US dollar broke the "7". From the perspective of the central bank, in the past 20 years, when the RMB has increased more and less when the dollar and a basket of currencies have risen. The main financial assets of Chinese people have been protected by the best financial assets, and their external purchasing power has steadily risen.

At the same time, it should be noted that while the rounds of currency related to the US dollar, such as the US dollar and the Hong Kong dollar, have been appreciated by other major currencies in the world, including euro, pounds, yen, etc. since this year. For example, the appreciation of the RMB to the yen this year even exceeded 12%, and the increase in the pound was close to 7%.

"The exchange rate fluctuation factors are complicated, and the existence of the two paragraphs means that the exchange rate is the process of increased bidirectional elasticity. The best response status of residents 'enterprises to exchange rates is to see the changes in quietness, do a good job, and do not blindly bet on'. 2017. At the beginning of the year, the market was generally expected to depreciate the RMB, and the company made a gambling in accordance with this, and the exchange rate of the annual annual exchange rate increased significantly, resulting in a total exchange loss of all A -share listed companies reached 17 billion yuan. "Zhang Yu, chief analyst of Huachuang Securities Macro Group, pointed out.

Li Fei, assistant minister of the Ministry of Commerce, said on September 5 that the current external environment is more complicated and severe, and the risk factors affecting the RMB exchange rate have increased. The Ministry of Commerce will continue to guide foreign trade enterprises to establish exchange rate risk neutral consciousness with the People's Bank of China and Foreign Exchange Bureau, encourage bank institutions to innovate and optimize products, and provide more SME foreign trade enterprises with exchange rate avoidance and cross -border RMB settlement services.

Seven, influence geometry on export?

How much can the depreciation of this round of RMB support for export -oriented companies?

"In this round of this cycle, China's economic situation, especially exports, weakened, and the" reservoir "that supported the RMB no longer, the selection of the renminbi directly follows the US dollar index depreciation, while maintaining the stability of the CFETS basket exchange rate. Depreciation supports exports. At the same time, due to the stable exchange rate of a basket, the pressure of international revenue and expenditure is small. "CITIC Construction Investment pointed out.

Guolian Securities pointed out that the impact of exchange rate on economic fundamentals is mainly reflected at the level of foreign trade. From the perspective of trade, the depreciation of the renminbi is conducive to export -oriented enterprises, and its competitive advantage and profitability are expected to be strengthened; it is more unfavorable for import trade. From the perspective of data, since April this year, the RMB has begun a round of depreciation cycle. After excluding the impact of the epidemic, the exports have improved since May, exports have maintained a positive growth year -on -year, and imports have continued to fluctuate low year -on -year. It reflects the positive correlation between the depreciation of the renminbi to the export, and there is negative correlation with imports. From the analysis of national data, the depreciation of the renminbi is one of the factors to promote China's net exports, but the net export situation is also affected by factors such as the domestic economic fundamentals, the international trade environment, and the needs of import and export countries.

8. Effects of geometry on the financial market?

Zhang Yu talked about the impact of exchange rate changes on the capital market that speed is more important than points. She believes that the equity market has little response to the absolute point of the exchange rate, and the response to fluctuations is greater. Ascending and faster will bring A shares to increase, becoming the main contradiction of the margin of equity.

Everbright Securities believes that in terms of stock markets, the depreciation of the exchange rate has led to a decrease in net inflow volume of land stocks, and even from net inflow to net outflow. Therefore, there will be a recovery pressure in industries with high shareholding of overseas investors. In terms of debt markets, due to the general economic fundamentals during the depreciation of the exchange rate, the fundamental fundamentals of the country are also under pressure, and the yield of China debt has a strong downside power. Essence

Source | Surging News. The copyright belongs to the original author.

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