Analysis Of The Logic Of RMB Exchange Rate Depreciation Adjustment

The spring meetings of the International Monetary Fund (IMF) and the group of 20 (G20) will be held soon after P.

Looking back, it is not difficult to find that monetary authorities generally express their policy intentions of "showing good" through the central parity of RMB when they are usually similar to important international conferences or activities.

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< p > may be coincidence. In the next few days, the central parity of RMB against the US dollar was slightly stronger.

In April 9th, the central parity of RMB went back to 6.1490.

In fact, this position is 0.8% lower than the highest 6.0990 this year, and the spot price this year will depreciate by about 3%.

However, the RMB exchange rate has appreciated by about 35% since its reform in July 2005.

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< p > in many people's view, the so-called exchange rate marketization will inevitably follow the process of RMB appreciation.

Perhaps even in a longer period of time, the renminbi may appreciate, but it will not be phased out.

After the reform, the RMB exchange rate has depreciated in stages in 2012. Now it is the two degree depreciation, and more is the "false move".

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< p > the same is true. Despite the background of "QE exit", the Fed or entering the interest raising channel, "a href=" //www.sjfzxm.com/news/index_cj.asp "China's economy < /a deceleration" and other superimposed factors, China's economy is entering a period of RMB revaluation, but the market still thinks that the RMB exchange rate is a slight appreciation trend in the long run.

To some extent, the biggest obstacle to the flexibility of the RMB exchange rate may be the "bottom line" guarantee.

Arbitrages seem to know that the central bank can hardly get away from intervention because they believe in the bottom line of China's growth.

As long as the central bank reduces intervention, arbitrage trading may come back.

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< p > this is like a game and trade-off between arbitrage trading and reform layout.

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< p > the result of the game can be seen from the customs data. In March, the growth rate of China's exports to Hong Kong and Taiwan fell to -43.6% and -23.5% respectively, lower than the total export growth rate.

The reasons are high base, strict regulation and weak exchange rate.

Theoretically, exchange rate depreciation can not enhance export competitiveness, but it can not be understood by RTHK.

When the RMB is strong, many arbitrage funds take the route of the fake trade documents. If the exchange rate is weak, the overseas RMB will not be able to arbitrage through the channel, so there is no "export".

In other words, this competition has taught the arbitrage Bank of the central bank to win.

But then comes the economic data after "clearing up".

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< p > Zhou Xiaochuan, governor of the Central Bank of China, said in April 10th "a href=" //www.sjfzxm.com/news/index_cj.asp "Boao forum < /a" that the RMB exchange rate should gradually withdraw from normal foreign exchange intervention, and the volatility will also widen.

After the announcement, the central parity price in April 11th was 6.1495, a slight increase of 15 basis points compared with the previous trading day.

However, a senior US Treasury official has hinted that the United States does not fully believe that the Chinese government will reduce its intervention in the foreign exchange market.

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< p > of course, we can completely ignore the US's comments on China's a href= "//www.sjfzxm.com/news/index_cj.asp" and the exchange rate policy < /a >.

As we all know, the main reason for the trade imbalance between China and the United States is not the RMB exchange rate, but also more important factors, such as the structure of Sino US investment and trade, the difference between China and the United States in terms of savings rate and consumption rate, the different division of labor in the industrial chain formed by economic globalization, and the unreasonable international currency system.

But what we need to consider is that we can not ignore the direction of exchange rate marketization reform under the "bottom line" thinking, and the layout and overall consideration of a package of financial reform.

After all, people will worry that the continued low RMB exchange rate may eventually become the trigger for a crisis. Investors worried about the financial crisis in China want to know when and when the crisis will come.

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< p > it is undeniable that China has suddenly seen the typical characteristics of "Minsky moment", that is, an opportunistic financing activity of an economy occupies a relatively high proportion with Pang style financing activities, leading to instability in the financial system. There will be a risk of breaking out of the financial crisis and falling into a long deleveraging cycle from within, marking the collapse of asset value.

Of course, it can not be judged that China is near the eve of the great crisis.

But in this context, the RMB exchange rate should be "hold".

Although the government has repeatedly stated that the RMB exchange rate has reached a level of equilibrium, no one knows the true price of the RMB exchange rate after the "market clearing".

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