Against the backdrop of another sharp drop in the US dollar index overnight, the central parity of the RMB against the US dollar reached a new high on July 27, rising to 6.4426, quickly approaching the 6.44 integer mark. Analysts said that the central parity of the RMB exchange rate set a new high for exchanges on Tuesday and Wednesday for two consecutive trading days, once again demonstrating that the RMB still has strong appreciation momentum during the current period; on the other hand, it has been plagued by the US debt ceiling crisis. The falling US dollar index remains a key reason for the recent push to strengthen major non-US currencies, including the renminbi. In the short-term, the dollar is still difficult to get rid of the weak background, the current appreciation trend of the renminbi is expected to continue. Weak dollar becomes an important pusher China Foreign Exchange Trading Center announced on Wednesday that the central parity of the US dollar against the RMB exchange rate in the inter-bank foreign exchange market on July 27, 2011 was US$ 6.4426, a sharp drop of 44 basis points from the previous trading day. Two trading days hit a new high since the exchange rate reform. Statistics show that as of July 27, the appreciation of the RMB since 2011 has reached 2.80%, of which the appreciation of the RMB in the second half of the year has reached 0.45% in less than a month. With regard to the continued strength of the RMB exchange rate in the near future, analysts pointed out that on the one hand, the RMB still has an appreciation demand in terms of exchange reform and anti-inflation; on the other hand, the fall of the US dollar in the international exchange market is also an important driving force. On the 26th in the international foreign exchange market, investors’ anger on the US debt ceiling crisis was once again vented to the US dollar, and the US dollar accelerated its decline on the basis of continued weakness in the past few trading days. On the day, the US dollar index fell to a minimum of 73.45 points, close to a three-month low, and is not far from the nearly three-year low of 72.70. Xie Dongming, a foreign exchange analyst at OCBC Bank in Singapore, said that although the market still believes that US President Barack Obama may eventually compromise, more and more market participants believe that the United States may lose its highest rating. According to a recent Reuters survey, 60% of US economists believe that the United States will be downgraded. On the whole, regardless of whether the United States can finally reach an agreement on the debt issue, the situation is more unfavorable to the US dollar. Given the short-term decline in the dollar, the strength of major non-US currencies is expected to continue in the short term. The appreciation trend will continue Since July, the people's appreciation value of the RMB forward exchange rate with the overseas non-deliverable forward foreign exchange (NDF) market has been expected to continue to decline. Some overseas markets have seen the appreciation of the RMB near the end and bearish on the long-term exchange rate of the RMB. The sound began to emerge. However, from the actual performance of the RMB exchange rate in the near term, the RMB still shows an extremely stable appreciation. On the 27th, the overseas non-deliverable forward foreign exchange (NDF) market dollar to the one-year NDF continued the narrow trading pattern of the previous trading day, and continued to trade at 6.37, corresponding to the appreciation of the RMB against the US dollar after one year. At around 1.1%, it shows that there is still a lack of confidence in the overseas market for the continued appreciation of the renminbi. Analysts pointed out that the expectations of overseas investors are much lower than the rate of appreciation of the renminbi this year and in the recent period. From this perspective, the cautious expectations of overseas markets are not reasonable. Xia Bin, the monetary policy committee of the People's Bank of China, said recently that China should continue to maintain a certain degree of flexibility in the RMB exchange rate and prevent input-type price increases. In this regard, some observers pointed out that this has largely demonstrated the policy intention of the monetary authorities to continue to vigorously promote the reform of the RMB exchange rate formation mechanism and moderately maintain the speed of RMB appreciation. Xie Dongming also said that the data shows that although the renminbi continues to appreciate against the US dollar in the near future, the appreciation is still weaker than other major currencies, and the appreciation of the renminbi may not be fully reflected in the near future. In addition, a large foreign exchange trader in Shanghai pointed out that the regulatory authorities have recently asked commercial banks to strengthen the review of foreign exchange capital settlement of foreign-funded enterprises to prevent the inflow of hot money for the appreciation of the renminbi. Breaking the overseas market's expectation of the revaluation of the renminbi is conducive to slowing the inflow of hot money. From this point of view, there is no contradiction between the weakening of the renminbi appreciation expectation in overseas markets and the appreciation trend of the renminbi. 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The yuan has appreciated 2.8% against the US dollar this year.
Abstract Against the background of the sharp fall in the US dollar index overnight, the central parity of the RMB against the US dollar reached a new high on July 27, rising to 6.4426, which quickly approached the 6.44 integer mark. Analysts said that the central parity of the RMB exchange rate this Tuesday, Wednesday...