Enhancing RMB Exchange Rate Flexibility

< p > overvaluation has brought risks to China's economy, such as hollowing out industries, economic "de going to reality", and increasing non-performing loans in banking industry.

It is necessary to revise the overvalued RMB real effective exchange rate, improve the RMB exchange rate formation mechanism, enhance exchange rate flexibility, modify the long term equilibrium exchange rate, enrich the risk management tools of exchange rate, and establish effective risk hedging measures.

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Since P > 2014, the RMB has changed to a strong appreciation in 2013. As of the end of 3, the cumulative depreciation rate of RMB against the US dollar (CNY) has reached 1%.

In spite of the significant depreciation of the RMB, the depreciation rate is still not enough. According to the author's capital enhanced equilibrium exchange rate model, the effective exchange rate of RMB is still overestimated by 2.7% as of February 2014. That is to say, at present, there is still room for RMB to continue "a href=" http:// www.sjfzxm.com/news/index_cj.asp > depreciation "/a".

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< p > the current RMB devaluation is mainly the result of market function.

Since 2014, the offshore RMB (CNH) market has depreciated earlier than the onshore RMB market, and its depreciation rate has exceeded that of the onshore market.

By the end of 3, the depreciation rate of CNH was about 3%.

CNH is mainly determined by the supply and demand sides of the offshore market, reflecting the market price and expectations. The depreciation of CNH indicates that the offshore market is expected to depreciate. This signal is pmitted to the domestic market, causing the depreciation of CNY.

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< p > > a href= "//www.sjfzxm.com/news/index_cj.asp" > market expectation < /a > the main reason for the depreciation of RMB is that the appreciation of RMB has been excessive since 2013.

In 2013, the RMB appreciated faster against the US dollar, and the real effective exchange rate of the RMB appreciated by 6%. The appreciation rate was 3 times that of 2012, which was 11% higher than the 2012 low point, which deviated significantly from the equilibrium exchange rate level.

The reason why the a href= "//www.sjfzxm.com/news/index_cj.asp" > RMB > /a > has increased significantly. First, in the backdrop of the appreciation of the US dollar and the depreciation of other currencies against the US dollar, the renminbi's strong trend of exchange has led to the overestimation of the effective exchange rate of the RMB.

In 2013, the exchange rate pattern of our country changed, the US dollar entered the appreciation channel, the actual dollar index appreciated 4% of the main currencies, the emerging market currencies depreciated sharply against the US dollar, the peso dropped by 9%, the India rupee dropped by 16%, and Brazil's real dropped by 19%. However, in the same period, the RMB continued to appreciate 3% in the face of the strong dollar, and the superposition of the two increased the appreciation rate of the renminbi. The speed of RMB appreciation was accelerated in Philippines.

The two is the expansion of China's foreign trade surplus, and the demand for settlement further aggravates the appreciation of the renminbi.

Since the international financial crisis in 2008, China's trade surplus has been expanding.

In 2013, China's trade surplus was 1 trillion and 600 billion yuan, an increase of 11% over the same period last year, an increase of 20% over 2009, which was greatly affected by the financial crisis.

China's foreign trade settlement mostly uses US dollars. When investing in China, we need to convert US dollars into RMB. Because of selling US dollars to buy RMB at the time of foreign exchange, the demand for RMB in foreign exchange settlement is increasing, which further aggravates the pressure of RMB appreciation.

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< p > the strong appreciation of the RMB exchange rate in the past year has led to the fact that the effective exchange rate of RMB has deviated significantly from the equilibrium exchange rate. The RMB exchange rate has the necessity of correcting the equilibrium exchange rate under the action of the market. Therefore, the depreciation will inevitably occur. This is also the main reason for the significant depreciation of the RMB exchange rate since 2014.

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