RMB exchange rate hits new low in the year China's economic resilience supports exchange rate stability2018.07.20 08:59
On the 25th, both onshore and offshore RMB exchange rates hit a new low during the year, breaking through the 6.54 and 6.55 mark respectively. Onshore RMB exchange rate against the US dollar once fell to 6.5433 and closed at 6.5240, down 276 basis points from the previous trading day.
Last week, the onshore RMB exchange rate against the U.S. dollar set a maximum weekly decline since mid-September last year, which fell 796 basis points this week. After the 25-day decline, the increase in the yuan-dollar exchange rate since the beginning of the year has been wiped out.
The pullback of the renminbi to the US dollar has drawn market attention. However, experts in the industry believe that although the current expectations have been adjusted compared to the appreciation of the RMB at the beginning of the year, the RMB exchange rate is still a two-way expectation.
On the 24th, the People's Bank of China announced a 0.5 percentage point reduction in orientation. Market participants believe that the continued strength of the US dollar and the inconsistent pace of monetary policy between China and the United States have further narrowed the gap between China and the United States, and the exchange rate of the yuan against the US dollar has fallen.
Zhang Ming, chief economist of Ping An Securities, believes that the asymmetry of China-US monetary policy will further narrow the gap between China and the United States, which is a direct cause of the recent decline in the exchange rate of the yuan against the US dollar.
In fact, around April 17th, the onshore RMB exchange rate began to fluctuate against the U.S. dollar, and almost the same time, the US dollar index was stronger. The research team of CITIC Securities believes that the main reason for the devaluation of the RMB is the strengthening of the US dollar. The CFETS RMB exchange rate index and the US dollar against the RMB have deviated from the middle price. However, the research team emphasized that although the strong dollar has brought great fluctuations to the global market, the RMB has relatively strong resilience.