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2011 RMB Exchange Rate "Stable" Potential Start

2011/2/11 11:20:00 69

In the first two trading days of the year, the RMB was driven by interest rate increase.

exchange rate

"Stability" will start.

On the 9 and 10 days, the central parity of the RMB against the US dollar continued to rise slightly before the year, which once again hit a new high since the reform.

By analyzing the recent measures taken by the central bank and linking the fluctuation of the central parity price and the trend of the spot market, the renminbi will still be "stable" in the near future.

China's foreign exchange trading center announced yesterday that the central parity of RMB against the US dollar in February 10th was 6.5849, up 1 basis points from the previous trading day, and again hit a new high since 2005.

On the 9 day, the central parity of RMB against the US dollar was 10 basis points higher than the last trading day before the lunar new year.

Statistics show that since 2011, the total appreciation of RMB has reached 0.57%.

Analysis of the industry, interest rates on spot

RMB rate

It plays a supporting role.

To manage inflation expectations, the central bank announced on the 8 day that since February 9, 2011, the benchmark interest rates for one-year lending and lending of financial institutions have increased by 0.25 percentage points respectively.

Earlier, there was a view that the appreciation of the renminbi can also fight against imported inflation to a certain extent, which is conducive to easing inflation expectations and, therefore, to a certain extent, instead of raising interest rates.

However, through the recent expression of the central bank and the use of a series of monetary policy tools, interest rate, deposit reserve and open market operation will still be a "major event" to curb inflation. The RMB exchange rate will follow the principle of gradual growth, and will steadily appreciate. It will not deliberately rise in order to curb inflation, nor will it become the "leader of" prudent monetary policy tools.

Moreover, careful observation, the central bank chose the last day of the Lunar New Year holiday to raise interest rates, in order to prevent the overseas "hot money" from taking the opportunity to arbitrage, and to a great extent ease the external driving force of RMB appreciation.

In the two days, the central parity of RMB against the US dollar increased slightly. It can be seen that management's attitude towards RMB appreciation is still "stable".

Spot market

The reaction has also been mild.

Affected by the rise in the middle price, the renminbi rose slightly to 6.5865 against the US dollar in the spot market on the 10 day, up 73 basis points from the previous trading day.

Traders pointed out that although the middle price has reached a new high, the appreciation is very limited, continuing the slight fluctuation of the year ago, showing that the management maintained the basic stability of the RMB exchange rate, so the market further pursued the high RMB power shortage.

However, the "noise" of pressure on RMB appreciation has not stopped.

Although the US Treasury issued the international economic and exchange rate policy report 4 this month, China is not in line with the definition of currency manipulation countries, but the report believes that the value of the renminbi is still undervalued and that the RMB should accelerate its pace of appreciation.

Meanwhile, Geithner, the US Treasury Secretary, called on Brazil and the United States and Pakistan to join hands in urging the renminbi to appreciate.