The central parity rate of the RMB exchange rate hit a new high in the past six months and remains basically stable with a foundation

Xinhua News Agency, Beijing, November 25 (Xinhua) “China Securities Journal” published an article on the 25th, “The central parity rate of the RMB exchange rate hit a new high in the past six months and remains basically stable with a foundation.” The article stated that in recent days, the RMB exchange rate has gradually strengthened and ushered in a rebound. According to data from the Foreign Exchange Trading Center, on November 24, the central parity rate of the RMB against the US dollar was reported at 7.1151 yuan, an increase of 61 basis points from the previous trading day, which was the highest quotation of the central parity rate of the RMB since June 10.

Experts said that the domestic economy has stabilized and rebounded, and the overlay policies have released a strong signal of “stabilizing expectations”, which will help the RMB maintain stability. Looking forward to the market outlook, factors conducive to the stability of the RMB exchange rate are gradually accumulating, and there is still room for a slight appreciation of the RMB exchange rate.

(File photo. Released by Xinhua News Agency)

RMB exchange rate strengthens

On November 24, the RMB market exchange rate trend was relatively stable. Wind data shows that as of 16:30, the closing price of the onshore RMB against the U.S. dollar was 7.1529 yuan, down 123 basis points from the previous closing price, with the highest intraday price at 7.1405 yuan; the offshore RMB against the U.S. dollar was at 7.1597 yuan, down 123 basis points from the previous closing price. It fell 73 basis points on the previous trading day, with the highest intraday price quoted at 7.1428 yuan.

Since November, the onshore and offshore RMB exchange rates against the U.S. dollar have recently shown a continuous upward trend, breaking through multiple important levels in succession. Wind data shows that as of press time, the onshore and offshore RMB exchange rates against the U.S. dollar rose by 1,647 basis points and 1,829 basis points respectively in November, with both increases exceeding 2%.

The central parity rate of the RMB against the US dollar also hit a recent high. According to the Foreign Exchange Trading Center, on November 24, the central parity rate of the RMB against the US dollar was reported at 7.1151 yuan, an increase of 61 basis points from the previous trading day, which was the highest quotation of the central parity rate of the RMB since June 10. Since November, the central parity has increased by a cumulative 628 basis points.

“As the onshore RMB exchange rate rose above 7.17 yuan, the RMB exchange rate achieved the ‘three prices in one’ of onshore, offshore and central parity rates.” said Li Liuyang, a foreign exchange expert at CICC.

Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, said that as the internal and external environment continues to improve, my country’s foreign exchange market and cross-border capital flows are expected to continue to operate smoothly.

There is room for appreciation in the future

As for the reasons for the recent strengthening of the RMB exchange rate, Zhao Wei, chief economist of China International Finance Securities, analyzed that the rapid weakening of the U.S. dollar is the direct driver of the strengthening of the RMB exchange rate, while the rapid fall in U.S. bond interest rates is the main reason for the weakening of the U.S. dollar. “The external pressure from the U.S. dollar has weakened, which has accumulated momentum for the strengthening of the RMB.” Nanhua Futures Research Report believes.

The domestic economy has stabilized and rebounded, and the overlay policies have released a strong signal of “stabilizing expectations”, which will help the RMB maintain stability.

Pang Ming, chief economist and director of the research department of Jones Lang LaSalle Greater China, said that with the intensification of monetary, fiscal and other policy adjustments, China’s economic recovery has further consolidated its positive momentum, and the fundamental support for the RMB exchange rate is expected to gradually strengthen. , China’s foreign exchange market will continue to operate steadily.

Looking forward to the market outlook, factors conducive to the stability of the RMB exchange rate are gradually accumulating, and there is still room for a slight appreciation of the RMB exchange rate. “On the one hand, exporters have demands for foreign exchange settlement and repayment before the end of the year and the Spring Festival, and the supply of U.S. dollars in the foreign exchange market will increase; on the other hand, due to the strong demand during holidays in Europe and the United States, the end of the year is the peak season for exports, usually in November and December. “Exports will rebound month-on-month. If exports continue to recover, the RMB exchange rate may receive positive support.” Li Liuyang said that the current round of RMB exchange rate rebound is not over yet, and the RMB exchange rate may enter a two-way fluctuation stage.

Wang Chunying said that in the future, as various domestic policies are implemented accurately and implemented, and positive factors continue to accumulate, the supporting role of economic fundamentals in the foreign exchange market will be further consolidated. In addition, the market generally believes that the Fed’s interest rate hike cycle is nearing the end, and the spillover impact on the international financial market will be moderated.

[Editor in charge: Yan Yujie]