2023-06-18 17:23:25
Guan Tao, chief economist of Bank of China Securities, said that after the exchange rate of the Chinese yuan against the US dollar fell below 7 again, the People’s Bank of China once called out to the market to curb speculation and restrain the exchange rate from fluctuating sharply. But after that, the People’s Bank of China did not continue to make moves, and the RMB continued to adjust. Why did the People’s Bank of China just say nothing? A few days ago, the State Administration of Foreign Exchange released the data of foreign exchange receipts and payments in May, which can analyze the logic of the People’s Bank of China’s current exchange rate policy.
In recent years, the RMB exchange rate has fluctuated around 7:1 for many times. From the perspective of the central parity rate, in early August 2019, due to the stalemate in the Sino-US economic and trade negotiations, the RMB fell below 7 for the first time since the exchange rate reform on August 11, 2015.
At the end of December 2019, due to rumors that China and the United States are about to reach the first phase of the economic and trade agreement, the RMB once again rose above 7.
In mid-February 2020, due to the outbreak of the new crown epidemic and the economic shutdown, the renminbi fell below 7 for the second time. In mid-July 2020, due to the effective prevention and control of the domestic epidemic, the economy took the lead in recovering, and the renminbi rose above 7 for the second time.
In mid-September 2022, the renminbi fell below 7 for three times due to the spread of the domestic epidemic and hindered economic recovery. In early December 2022, due to the optimization of epidemic prevention policies, real estate regulatory adjustments, and improved prospects for economic recovery, the renminbi rose above 7 for three times.
Since mid-May this year, the yuan has fallen below 7 for four times as recovery expectations have only been partially fulfilled.
The People’s Bank of China issued a press release on May 19, emphasizing that it will strengthen supervision, management, monitoring and analysis, strengthen expectations and guidance, correct pro-cyclical and unilateral behavior when necessary, and curb speculation. At the same time, members of the self-discipline mechanism are urged to consciously maintain the basic stability of the foreign exchange market and resolutely restrain the exchange rate from fluctuating greatly. On the same day, the trading price of domestic and foreign RMB exchange rates rose a few cents from the intraday low. However, after that, the stairs sounded and no one came down. The domestic closing price fell below 7.10 on May 31, and fell below 7.15 on June 13. The trading price once fell below 7.18 to 1 on June 15.
According to Guan Tao’s analysis, this is not because the People’s Bank of China has lost its trust in the foreign exchange market; in fact, in the first half of the above-mentioned press release, the People’s Bank of China pointed out that China’s foreign exchange market is expanding in breadth and depth, with the ability to balance itself, and the RMB exchange rate also has correction forces and mechanisms. Able to maintain basic stability at a reasonable and balanced level. The market paid too much attention to the warnings in the second half, but ignored the content of the first half.
Guan Tao said that in the reform of the RMB exchange rate, the mechanism is more important than the level. Most people think that the RMB breaks through 7, which means the appreciation and depreciation of the RMB, but what people in the industry see is that the RMB has opened up a flexible space for ups and downs, and the degree of marketization of exchange rate formation has increased. The RMB exchange rate is market-oriented. Under normal circumstances, it should be low (appreciation), buy high (depreciation), sell high (depreciation), sell high and buy low. That is, when the value is rising, people buy more foreign exchange and sell less foreign exchange. . If the RMB falls further and the market rushes to buy and hoard foreign exchange, it means that the foreign exchange market is malfunctioning.
Does this mean that the RMB exchange rate will fall all the way? Guan Tao disagrees. He believes that the normal function of exchange rate leverage adjustment will help release the pressure of appreciation and depreciation in a timely manner and avoid the accumulation of expectations of appreciation and depreciation. This means that exchange rate expectations will be convergent rather than divergent. On June 16, boosted by rumors of a package of economic stimulus policies, the Shanghai and Shenzhen 300 Index rebounded by 3.1%, and the cumulative net purchase of China Stock Connect was 17.3 billion yuan.
Of course, stabilizing expectations requires not only talking but also doing. When there is a relatively serious procyclical and herd effect in the market, the regulatory authorities must monitor and analyze daily high-frequency data to be able to take timely and targeted actions. As for which tools the regulatory authorities will use, as Zhou Xiaochuan, the former president of the People’s Bank of China, said, communication in the foreign exchange market must distinguish between different objects, and speculators do not need to reveal all the cards of the People’s Bank of China.
He said that instead of guessing whether there is a so-called new exchange rate cycle, it is better to actively adapt to the new normal of two-way exchange rate fluctuations.
recommended article
1687131485
#Guan #Tao #renminbi #breaks #Peoples #Bank #China #China #Instant #China