What about the increasingly "mature" renminbi? Guan Tao: Non-linear random walking

Beijing, 19 Jul (China News Service) -- What does the increasingly "mature" renminbi look like? Guan Tao, global chief economist of BOC Securities and former director of the Balance of Payments Department of the State Administration of Foreign Exchange, said in an interview with China News Agency's "China Focus Face to Face" recently: The renminbi is increasingly showing the characteristics of a mature currency with non-linear random wandering.

Guan Tao, Global Chief Economist of BOC Securities and former Director General of the Balance of Payments Department of the State Administration of Foreign Exchange, was interviewed by China News Service on "China Focus Face to Face". China News Service reporter Jia Tianyong photographed

Guan Tao said that there are many factors affecting the exchange rate now, these factors are sometimes dominated by factors of appreciation, sometimes the factors of depreciation are dominant, these effects are long and long, more will fall, more will rise.

In Guan Tao's view, there are actually multiple equilibriums in the foreign exchange market, that is, given the fundamentals, it is not possible to simply linearly introduce the appreciation or depreciation of the renminbi.

"I do believe in the concept that the economy is strong and the currency is strong. This is proved by historical experience, for example, after World War II, with the rise of the Japanese and German economies, the Deutsche Mark and the yen have long appreciated. Guan Tao said that in the medium and long term, if we follow the "14th Five-Year Plan" and the long-term goal of 2035, we will achieve a high level of opening up, achieve high-quality development, and have a strong economy and a strong currency, the renminbi will certainly have potential, but from this shore to the other shore, there must be a process, there is a lot of uncertainty, and the exchange rate of the renminbi may be both bullish and negative.

"Instead of talking about the new cycle of appreciation, it is better to adapt to the new normal of volatility, and we must not use unilateral thinking to look at the trend of the exchange rate." Guan Tao said bluntly that the more market-oriented we are, the more the exchange rate will present a mature currency characteristic of non-linear random wandering. (End)

Source: China News Network