International Online News: According to China News Service, Beijing, December 8th, a silent "transaction war" is starting in China's foreign exchange market.
On December 8, the China Foreign Exchange Trading Center reported a revaluation of the central parity of the RMB against the US dollar by 23 basis points. However, at noon on the 8th, the spot exchange rate quoted for the actual transaction has touched the daily limit for 7 consecutive trading days.
In the long period of nearly six and a half years since China implemented the “exchange reform†in July 2005, the parties have become accustomed to the renminbi’s march in the direction of unilateral appreciation, and “depreciationâ€, no matter the market or the regulators, "Wake up to God."
"This is a means of hedging shorting China, but it is by no means the turning point of the RMB exchange rate." Tan Yaling, dean of the China Foreign Exchange Investment Research Institute, said in an interview with the China News Agency reporter on the 8th.
“International investors expect China's economic growth to slow, coupled with other uncertainties, which have created a market for 'short China'.â€
But Tan Yaling, who has always advocated "disappearing the expectation of RMB appreciation," believes that "it is not a good time for the yuan to depreciate." She said that currency appreciation can boost economic confidence, and vice versa. When China's economic growth rate may slow down, once the expectation of RMB appreciation is weakened, it will “strike rather than preserve†the economy, and may even cause particularly “psychological harm†to the market.
Tan Yaling said that the continuous depreciation of the RMB against the US dollar should be "phased" and the RMB will continue to appreciate. "As long as China's economic growth momentum is still there, the renminbi will have an appreciation momentum. In the future, there will be a two-way volatility of the RMB exchange rate against the US dollar.
"At present, it is a good thing for the renminbi to break the unilateral appreciation, not a problem." Tan Yaling said.
In this regard, many experts hold the same view with Tan Yaling.
On December 8, the China Foreign Exchange Trading Center reported a revaluation of the central parity of the RMB against the US dollar by 23 basis points. However, at noon on the 8th, the spot exchange rate quoted for the actual transaction has touched the daily limit for 7 consecutive trading days.
In the long period of nearly six and a half years since China implemented the “exchange reform†in July 2005, the parties have become accustomed to the renminbi’s march in the direction of unilateral appreciation, and “depreciationâ€, no matter the market or the regulators, "Wake up to God."
"This is a means of hedging shorting China, but it is by no means the turning point of the RMB exchange rate." Tan Yaling, dean of the China Foreign Exchange Investment Research Institute, said in an interview with the China News Agency reporter on the 8th.
“International investors expect China's economic growth to slow, coupled with other uncertainties, which have created a market for 'short China'.â€
But Tan Yaling, who has always advocated "disappearing the expectation of RMB appreciation," believes that "it is not a good time for the yuan to depreciate." She said that currency appreciation can boost economic confidence, and vice versa. When China's economic growth rate may slow down, once the expectation of RMB appreciation is weakened, it will “strike rather than preserve†the economy, and may even cause particularly “psychological harm†to the market.
Tan Yaling said that the continuous depreciation of the RMB against the US dollar should be "phased" and the RMB will continue to appreciate. "As long as China's economic growth momentum is still there, the renminbi will have an appreciation momentum. In the future, there will be a two-way volatility of the RMB exchange rate against the US dollar.
"At present, it is a good thing for the renminbi to break the unilateral appreciation, not a problem." Tan Yaling said.
In this regard, many experts hold the same view with Tan Yaling.
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