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Li Qilin, head of the Minsheng Securities Collection Research Group, told the Securities Daily that in the short term, the median price of 6.7 is the lowest since October 2010. At this psychological level, the market bearish expectations are weakening. The RMB exchange rate will have strong support at the 6.70 threshold. It is expected that the RMB exchange rate will stabilize at this level for at least the next three months.
According to data previously released by the State Administration of Foreign Exchange, in May, foreign exchange spot and forward market net sales of $16 billion were the lowest since June last year. The foreign exchange purchase market is more balanced. The spot market purchases US$10.4 billion, of which the bank’s foreign exchange purchases have a new RMB forward position of US$8.8 billion, achieving net growth for two consecutive months.
Li Qilin believes that the data shows that the previous long-term arbitrage behavior has clearly converged, the RMB depreciation momentum has been moderate, and the market panic has subsided a lot.
Huang Zhilong, director of the Macroeconomic Research Center of Suning Financial Research Institute, told the Securities Daily that the recent signs of stabilization of the RMB exchange rate have become very obvious. After the British "Brexit" referendum, the RMB exchange rate depreciated greatly, especially for the US dollar exchange rate, which is the increasingly transparent and predictable in the new RMB exchange rate operating mechanism (ie "closing exchange rate + a basket of currencies") result. In addition, the trend of China's foreign exchange reserves not falling in June also shows that as long as there is no panic devaluation and capital flight pressure, the tendency of monetary authorities to intervene in the RMB exchange rate is getting smaller and smaller.
"At present, the RMB exchange rate is in a two-way volatility. In the short run, the renminbi will remain in two-way volatility, and the exchange rate against the US dollar will remain around 6.7. Of course, this depends on the trend of the RMB basket currency exchange rate index. The monetary authorities still focus on stabilizing a basket of currency exchange rate indices. Only when there is a panic-deficit expectation in the market will the main goal be to stabilize the exchange rate of the renminbi against the US dollar," Huang Zhilong said.
Li Qilin believes that the long-term capital outflow trend cannot be reversed due to the renminbi fundamental pressure still existing, the asset bubble is intensifying, the capital yield is lower, the trade income gap is falling, and the economic growth rate is slowing down. If the short-term exchange rate is unable to hold the important threshold of 6.70, or cause a new round of market panic in the market, the funds will be outflowed in advance, prompting a short-term rapid decline in the short-term RMB.
Onshore renminbi fell below 6.7 experts said the market bearish expectations are weakening
Abstract The reporter learned from the foreign exchange trading center that on July 18, the central parity of the RMB against the US dollar was reported at 6.6961, down 156 basis points from the previous trading day, setting a new low since October 2010. In addition, the RMB exchange rate in the onshore market fell below 6.7...
The reporter learned from the foreign exchange trading center that on July 18, the central parity of the RMB against the US dollar was reported at 6.6961, down 156 basis points from the previous trading day, setting a new low since October 2010. In addition, the RMB exchange rate in the onshore market fell below the 6.70 mark. As of press time, the RMB exchange rate on the onshore market was reported at 6.7005, down 122 from the previous trading day, and the offshore RMB exchange rate was 6.7088, down 40 from the previous trading day. Base point, the difference between the two sides is 83 basis points.