RMB Real Effective Exchange Rate Appreciation Pressure

Yesterday, the central parity of RMB against the US dollar was 6.1563, a slight decrease of 30 basis points, setting the lowest price in November 7th last year. However, the yuan rose more than a thousand points against the euro and the pound.

In fact, despite the recent depreciation of the renminbi against the US dollar, the euro has fallen by more than 20% against the yuan in the most recent year due to the passive appreciation of the renminbi against the euro and other non US dollar currencies. The Australian dollar has fallen by nearly 14% against the central parity price, and the central parity of the pound has fallen by about 10%.

The real effective exchange rate of RMB is rising all the way.

The real effective exchange rate of RMB rose 6.39% last year, and the real effective exchange rate of RMB rose 1.65% in January.

UBS Securities analysis pointed out that the differentiation of import and export trend, coupled with the improvement of terms of trade, pushed the foreign trade surplus in February to a new high of US $61 billion.

However, the continued appreciation of the US dollar against the main currencies such as the euro and yen and the continuous narrowing of domestic and foreign spreads led to continuous outflow of capital. In February, however, the yuan continued to depreciate against the US dollar, but the pace slowed down.

Central bank [micro-blog] vice president

In a recent speech, it pointed out that the RMB exchange rate has emerged in recent years.

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"In fact, the trend of RMB exchange rate in recent years is still very strong throughout the world. In recent one or two years, if the US dollar is the first strong currency, the renminbi can be said to be the currency of the second strong.

The euro and yen are the two major currencies, which depreciated more than 10% against the US dollar last year, while the renminbi depreciated by only 2%.

The real effective exchange rate of RMB rose by 6.39% last year.

The latest data released by the bank for International Settlements showed that the RMB real effective exchange rate rose by 1.65% in January this year, rising for eighth months in a row and setting a new high.

At the same time, the real effective exchange rate of RMB rose by 6.39% last year.

Insiders pointed out that despite the depreciation of the RMB against the US dollar, the real effective exchange rate of the renminbi against the basket of currencies is rising all the way, while the Chinese economy is mainly driven by exports, while exports are declining, and the weaker RMB exchange rate is needed to make export products cheaper for foreign buyers.

UBS pointed out that from the 1~2 foreign trade data, the cardinal effect has pushed up the export growth rate, but has lowered the import growth rate.

The strong dollar led to a decline in import and export prices in dollar terms, while lower import and export volumes, especially in the fall in commodity prices.

After seasonally adjusted and excluding the Spring Festival factor, we estimate that the actual external demand is still healthy, but the weak domestic demand is worrying.

The differentiation of import and export led to a new trade surplus of 61 billion US dollars in February.

Against this background, the interbank market liquidity is still tight and the RMB continues to depreciate, indicating that capital continues to flow.

Xie Yaxuan, a macro research analyst at China Merchants Securities, believes that the high export growth and high trade surplus may help to stabilize the RMB exchange rate. But the rapid strengthening of the US dollar index is still a major factor affecting the demand and supply of short-term foreign exchange.