RMB, a big counteroffensive!

The recent RMB exchange rate has attracted the attention of countless people.

Last month, affected by a combination of domestic and foreign policies, fundamentals and transactions, the monetary policies of China and the United States continued to diverge, the US dollar index rose, and global financial asset prices fell overall.

The mainland is no exception, and the RMB exchange rate is facing short-term and periodic depreciation pressure.

As a result, the size of foreign exchange reserves fell by 13.8 billion US dollars month-on-month, but because of this, its drag on the RMB exchange rate has been weakening.

In early November, the party committee of the People's Bank of China and the party group of the State Administration of Foreign Exchange held an enlarged meeting.

During the meeting, the central bank and the foreign exchange bureau once again urgently spoke out in response to the exchange rate:

The content still revolves around strengthening the management of the foreign exchange market and maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level.

Once again, it is necessary to firmly maintain the smooth operation of the financial market, promptly correct the pro-cyclical and unilateral behavior of the foreign exchange market, and prevent the risk of large fluctuations in the RMB exchange rate.

Why has it been emphasized to guard against big ups and downs and release the signal of "stabilizing the exchange rate"?

Normal fluctuations in the exchange rate generally do not have much impact, but if they continue to fall sharply, they will trigger capital outflows, and the stock market will fall, which in turn will further trigger capital outflows, and the exchange rate will fall further, and vice versa.

Once this vicious circle is formed, it is difficult to clean up.

To this end, in the second half of this year alone, the counter-cyclical adjustment tools of the foreign exchange market have been implemented one after another, such as the macro-prudential adjustment parameters of cross-border financing (upward adjustment), the foreign exchange deposit reserve ratio (downward adjustment), as well as the familiar MLF operation interest rate and reverse repo operation interest rate (downward adjustment), the issuance of central bank bills, etc.

Since November, the RMB exchange rate against the US dollar has recovered.

According to public information, as of 18:00 on November 7, the RMB exchange rate against the US dollar in the onshore and offshore markets hovered around 7.2849 and 7.2867 respectively.

There are also factors such as weak US employment data, the latest non-farm payrolls data that came in lower than expected, and the Fed's dovish interest rate hike signals.

At the same time, due to a series of measures to stabilize the exchange rate and relatively good economic fundamentals in China, overseas investment institutions have reduced their concerns about the risk of abnormal exchange rate fluctuations, and the buying sentiment of the RMB exchange rate has increased significantly.

As for the later trend of the RMB exchange rate, it was discussed before;

In the short term, global economic and policy uncertainties remain high, concerns about the imbalance between supply and demand in the U.S. bond market continue, and market volatility will still disrupt the valuation of the mainland's foreign exchange reserves.

Our country does not have the basis for medium and long-term depreciation, and the world's recognition of the RMB will continue to increase, which is a long-term trend, and the RMB exchange rate is expected to remain basically stable at a reasonable and balanced level.

In addition, the central bank will continue to flexibly use foreign exchange market control tools, and a package of policies to stabilize the economy will be introduced in due course.

The central bank's gold reserves have increased for the twelfth time in a row, which will further enhance the safety of China's foreign exchange reserve assets and help China cope with the complex external environment more calmly.

In addition, the official has repeatedly emphasized that the point of the exchange rate is inaccurate;

Investment is a multi-faceted matter, and the appreciation and depreciation of the RMB cannot be used as a basis for investment alone, so don't bet on a certain point.

Finally, I applied for the benefits of opening an account with Jianghai Securities.