Two Coincidences Of Devaluation Of RMB

Judging from the trend of the RMB exchange rate, the spot depreciation of RMB is unusual. In recent years, only in the two quarter of 2012 has there been a more obvious depreciation. The most common similarity between these two stages of depreciation is that the central bank has announced the expansion of the Yuan's volatility.

In mid April 2012, when the central bank announced that the fluctuation range of RMB exchange rate would be expanded from 5/1000 to one percent, the RMB exchange rate began to depreciate at the beginning of May of that year, and it was near to 6.38 in July. The depreciation rate was 1.2%.

Subsequently, the Federal Reserve launched the QE3 expectations and stabilized, and in September of the year when the Federal Reserve formally launched QE3, once again turned to unilateral appreciation.

In mid March this year, when the central bank announced that the fluctuation range of RMB was expanded from one percent to two percent, the yuan had depreciated. But then the RMB's short-term depreciation rate accelerated significantly, from the expansion of the volatility to the end of April, the depreciation rate of RMB reached 1.8%.

The two stage depreciation It is not coincidence that it coincides with the time when the RMB expands the range of fluctuation. This shows that the market tends to regard the expansion of the RMB Fluctuation Zone as a break of the renminbi. appreciation It is expected that there will be some policy implications. Therefore, the market needs to make "moderate" response to satisfy the intention that RMB exchange rate will gradually turn to two-way fluctuation.

In addition, after a change in the expectation of RMB appreciation, we find that another similarity between 2012 and this year is that foreign exchange deposits in the mainland have increased significantly, and companies have shown signs of hoarding the US dollar.

This caused the territory. dollar Loose liquidity and impact on the future settlement intention; and the difference between 2012 and this year is that the first half of 2012 did show signs of a slowdown in foreign exchange liquidity growth, while foreign exchange liquidity inflows steadily increased in the first half of this year, and the market's overall willingness to exchange foreign currency was stronger.