China Foreign Exchange Trading Center data, as of 9:15 on January 28, the yuan against the us dollar median price of 6.3746, down 364 basis points.
Screenshot source: China Foreign Exchange Trading Center
Historical data shows that the midpoint of the previous session was 6.3382, the onshore 16:30 closing price was 6.3645, and the night 23:30 closed at 6.3690.
The dollar index rose sharply on the 27th. The dollar index, which measures the greenback against six major currencies, rose 0.87 percent on the day, closing at 97.2460 at the end of the session.
Recently, the Federal Reserve's Federal Open Market Committee (FOMC) released a statement at the January interest rate meeting, announcing that it would keep the benchmark interest rate unchanged in the range of 0% to 0.25%. Markets expect the Fed to raise interest rates in March.
Zhong Zhengsheng, chief economist of Ping An Securities, believes that the correlation between the RMB exchange rate and the US dollar index has been strengthened again, and the US dollar index will be supported by the US economic recovery and the Fed's interest rate hikes in 2022, thus bringing some pressure to the RMB exchange rate.
Qin Tai, chief macro analyst of Shenwan Hongyuan, pointed out that the Fed's tightening expectations have been strengthening, but the mainland's monetary policy has taken the lead in normalization in the early stage, accumulating policy space for the current stable growth, and the probability of the mainland following the Fed's tightening is extremely low. What is more worthy of vigilance is the downside risk of external demand, with the expectation of resonance contraction of monetary and fiscal policies in developed economies continues to strengthen, the cooling trend of external demand may be further intensified.
China Finance Magazine published an article by Sun Guofeng, director of the Department of Monetary Policy of the Chinese Bank of China, on the 27th, and Sun Guofeng pointed out that the RMB exchange rate should be basically stable at a reasonable and balanced level. Let market supply and demand play a decisive role in the formation of exchange rates, enhance the flexibility of the RMB exchange rate, and give play to the function of exchange rate adjustment macroeconomic and balance of payments automatic stabilizer. There are many factors affecting the exchange rate, the exchange rate is not accurate, and two-way fluctuations are the norm. Maintaining the basic stability of the RMB exchange rate at a reasonable equilibrium level is the goal, and the exchange rate may deviate from the equilibrium level in the short term, but in the medium and long term, market factors and policy factors will correct the exchange rate deviation. It is necessary to strengthen the management of expectations, strengthen the macro-prudential management of cross-border capital flows, guide enterprises and financial institutions to establish the concept of "risk neutrality", encourage financial institutions to provide exchange rate risk management services for small and medium-sized enterprises, and maintain the stable and healthy development of the foreign exchange market. (Zhongxin Jingwei APP)