RMB Exchange Rate Middle Price Management Guide Exchange Rate Anticipation

In China's interbank foreign exchange market, the people's Bank of China will authorize the China foreign exchange trading center to announce the RMB exchange rate between the RMB and the US dollar and euro at 9:15 every working day.

On the basis of this price, the trading price of RMB against the US dollar will fluctuate within 2% of the middle price.

RMB pair

The 7 currencies of yen, Hong Kong dollar and so on are in the exchange rate of RMB against the currency.

The amplitude of the upper and lower 3% is fluctuated.

The Yuan's trading price for Malaysia's ringgit and Russia's rouble fluctuated within 5% of the central parity of RMB against the currency's exchange rate.

Data show that between February 5, 2015 banks

The middle price of the RMB exchange rate is 1 yuan to 6.1366 yuan, 1 yuan to 6.9748 yuan.

In the foreign exchange market, the central parity of the RMB exchange rate is an important reference factor.

Insiders said that the RMB exchange rate intermediate price management made the RMB exchange rate two-way floating characteristics obvious, and enhanced exchange rate flexibility.

Generally speaking, the central parity of the RMB exchange rate increases and the depreciation of RMB is expected.

Specifically, the rise in the RMB exchange rate intermediate price will produce positive effects on China's exports, but devaluation is expected to increase the pressure of capital outflow; if the RMB exchange rate decreases, the possibility of "hot money" inflow will increase.

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There are three main reasons for the overvaluation of the renminbi:

First, according to the theory of purchasing power parity, the same quality of commodities, including bulk agricultural products (000061 shares), is cheaper than the domestic market, which means that the RMB is overvalued.

In fact, in recent years, the prevalence of tourism in Shenzhen has been popular. People in Hongkong actually buy daily necessities in Hong Kong, which is evidence that the renminbi is overvalued.

This year's central document No.1 pointed out that the price of China's staple agricultural products has been higher than that of the international market for many reasons, but the overvaluation of RMB is certainly one of its important factors.

It is not alarmist. If the RMB continues to appreciate, it will surely destroy the whole Chinese agriculture.

Second, according to the theory of interest rate parity, does China still have room to raise interest rates? I don't think so. If interest rates are pulled up again, even if they remain the status quo, China's real economy will go bankrupt in large areas.

In fact, the difficulty of financing and the high cost of financing are the real problems that lie ahead of the Chinese government.

Well, if we think that the RMB interest rate fall is expected to be determined, and the US dollar rate hike is expected to be determined, why does the renminbi have to continue to appreciate?

Third, the downward pressure on China's economy is huge, and the US economy is not stable enough, but at least it is a shock.

Based on the comparison of economic fundamentals, should the RMB appreciate or depreciate against the US dollar at least?

We always say: let the market supply and demand determine the RMB exchange rate.

Sorry, the theoretical basis of this view is the effective market hypothesis.

This theory holds that all information that affects prices will be included in the results of market exchanges.

Since China's trade is "unbalanced", the change in the RMB exchange rate will automatically restore its balance.

Is that so?