(Economic observations at the end of the year) The RMB exchange rate elasticity broke a 24-year record. Where are the trends in 2019?
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China News Agency, Beijing, 30 December (Xiabin) The trend of the RMB exchange rate in 2018 can be described as "the first, strong, weak two-way fluctuation," which is a manifestation of the gradual increase in the flexibility of the RMB exchange rate.
From January to April 2018, the renminbi continues its upward trend in 2017, and the highest rises to the range 6.2, then in November, the renminbi exchange rate falls under pressure, and the depreciation rate is faster, lower than domestic and international environmental changes , and close to 7 By the end of this year, with a number of steps being launched to increase market confidence and China-US trade friction to subside, the RMB exchange rate gradually stabilized and remained close to 6.9.
Calculated by the on-the-spot exchange rate of the RMB against the US dollar, the annual up and down amplitude in 2018 exceeds 7300 basis points, which set the biggest record since the exchange rate was consolidated in 1994.
"In 2018, the domestic foreign exchange market continues to increase the depth and breadth, promote market volatility of the RMB exchange rate, and increase exchange rate flexibility." Lu Zhengwei, chief economist at the Bank of Industry, said that with the further development of the foreign exchange market, the flexibility of the RMB exchange rate and marketing level had increased. .
Lu's political commissioner indicated that the renminbi's annual volatility against the US dollar in 2018 was 4.6%. Although there are still gaps compared to the yen, euro and sterling, exchange rate elasticity has increased year by year compared to the renminbi itself.
Guan Tao, a senior researcher at the China Financial Forty Forum, believes that the two-way volatility of the RMB exchange rate has increased significantly in 2018. For the whole year, the maximum decline in the medium-term low of the RMB exchange rate is 9.9%, which much higher than the levels of 5.9%, 7.1% and 6.5% from 2015 to 2017.
Data shows that among the seven foreign exchange reserves announced by the International Monetary Fund, the maximum volatility of the RMB exchange rate in 2018 is ranked fourth, while the previous three years are below.
Where did the RMB exchange rate occur in 2019? Wang Youxin, a researcher at the Bank of China International Finance Institute, told China News Service that if the US stock market pulls back to manageable levels next year, the US dollar index will continue to increase moderately, and is expected to reach 98, which will bring further pressure at the RMB exchange rate; If the US dollar index drops back to 90, safe-haven funds will increase their RMB asset ownership, and the RMB exchange rate will stabilize and rebound.
"High volatility will be the main theme of global financial markets in 2019. If more market decisions are made, the RMB exchange rate will fluctuate widely." However, Guan Tao proposed that in the current situation of management fluctuations, the future There are three scenarios that allow for the RMB exchange rate.
The first is a benchmark situation, that is, if the market believes that the government has the will and ability to maintain the stability of the RMB exchange rate, the market will not actively attack the RMB, and the exchange rate of the RMB is expected to fluctuate in a narrow range.
The second is a good situation. If the Chinese economy is stable, China-US economic and trade relations improve, and the US dollar weakens again, there will be fundamental support for the stability of the RMB exchange rate, and even surprise appreciation will not be eliminated.
The third is a bad situation. If the Chinese economy continues to decline, China-US economic and trade relations deteriorate, and the US dollar continues to strengthen, the stability of the RMB exchange rate will face a test.
Wang Youxin stressed that even if there is a short-term rapid decline in future exchange rates, or abnormal fluctuations in cross-border capital flows, the People's Bank of China has rich experience and sufficient tools to deal with extreme situations. Therefore, it is necessary to have full trust in the Chinese economy and the RMB exchange rate.
Looking ahead, political commissioner Lu said that despite uncertainties and changes in the external environment, China will continue to maintain a general orientation to open up. The opening up of trade and investment, reforming the mechanism of exchange rate formation, and reducing foreign exchange controls as a driving vehicle for the new three horses will be promoted in a trinity and orderly manner in the future. The internationalization of the RMB will make greater progress in the field of investment and financing.
Guan Tao believes that in the future, deepening exchange rate market reforms must be coordinated and integrated. While improving exchange rate regulation, the government must begin to accelerate the development of the foreign exchange market by increasing the number of trade entities, enriching trade products, and loosening trade restrictions. We must rationalize the relationship between foreign exchange supply and demand by reducing administrative control over foreign exchange earnings and expenditures.
At the same time, there is a need for sustainable market education. Guan Tao said: "How many markets can overcome floating fears and determine the extent to which the RMB exchange rate market can work."