Q: Will RMB Continue To "Depreciate"?

< p > fell 282 points on that day. In February 28th, the a href= "http://sjfzxm.com/news/index_s.asp" > RMB < /a > dropped again after the opening of the spot exchange rate against the US dollar, which once slumped more than 500 points. The lowest hitting 6.1808 was 0.86%.

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< p > China's State Administration of foreign exchange has publicly stated that the Yuan's "a" http://sjfzxm.com/news/index_s.asp href= > depreciation "/a >" is a normal fluctuation and does not need to be decomposed ".

What is the cause of the depreciation? What is the impact? What is more important is: is this the beginning of an era, or is it just an episode? Where will the RMB exchange rate go in the future? < /p >

< p > > strong > 1 Why did the RMB suddenly depreciate? < /strong > /p >

In 2014, the central parity of RMB decreased rapidly from 6.0969 yuan to 6.1214 yuan, and the depreciation rate was about 0.4%. The spot exchange rate depreciated to 6.18 from 6.04 in January 13th, and the depreciation rate has already exceeded 2%. P

Almost all the increase in last year's total consumption.

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< p > < strong > reasons 1. China's economic growth is under pressure < /strong > /p >

Tan Yaling, President of the Investment Research Institute (P), China's < a href= "http://sjfzxm.com/news/index_s.asp" > foreign exchange < /a >, told the Beijing News reporter that the devaluation of the RMB has great relations with the domestic macroeconomic trend.

"At present, domestic real estate data and manufacturing indicators all show pressure.

Although China's export situation was good in January, PMI data showed that the real economy still had insufficient growth momentum.

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< p > < strong > reason two the United States withdrew from the QE effect < /strong > /p >

Zhang Monan, deputy researcher of the p China International Economic Exchange Center, told the media that from December last year to January this year, the Federal Reserve decided to withdraw from the QE to the formal implementation.

This time, the depreciation of the renminbi shows that the US withdrawal from QE has really hit the Chinese market.

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< p > < strong > reasons three the central bank guides the extrusion arbitrage fund < /strong > /p >

P (January) FDI (foreign direct investment) was US $10 billion 763 million, an increase of 16.11% over the same period last year, and the net foreign exchange settlement of bank customers doubled to 76 billion 300 million US dollars, a year high.

This has increased China's foreign exchange reserves by more than US $432 billion 700 million last year, more than US $3 trillion and 800 billion.

Chang Jian, chief China economist at Barclay, said: "capital inflows continued to be strong in January. There is no data showing that a large number of capital outflows or fundamental deterioration in recent weeks.

This situation also confirms another view that the recent devaluation of the renminbi is mainly based on the risk of the people's Bank of China in preventing speculative capital.

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< p > strong > 2 RMB will enter "two-way fluctuation"? < /strong > /p >

< p > aiming at the continuous downward trend of RMB exchange rate in recent domestic and foreign markets, the head of relevant departments of the State Administration of foreign exchange recently said in a press interview that the fluctuation of the RMB exchange rate is a normal fluctuation.

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< p > since April 16, 2012, the daily fluctuation range of RMB against the US dollar has expanded from 0.5% to 1%.

The difference between the maximum spot selling price and the minimum spot purchase price should not exceed that of the current exchange rate. The range of the intermediate price will be expanded from 1% to 2%.

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Han Yan P, a professor of finance at Beihang University, pointed out that two-way volatility does not mean that the renminbi will no longer appreciate, but that it will continue to depreciate in the trend of slow appreciation, or that the trend of exchange rate in the short term can not be expected.

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< p > the State Administration of foreign exchange explicitly stated that the two-way fluctuation of the RMB exchange rate will become the norm, and the market participants should take the initiative to adapt and respond positively.

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Which industries benefit from < p > strong > 3? < /strong > /p >

"P > a Tianjin import and export forwarding company official told reporters:" over the past few years, the continued appreciation of the renminbi has made the domestic export enterprises pressure. If the RMB exchange rate changes the expectation of unilateral appreciation, we believe that the enthusiasm of foreign trade enterprises will generally rise. "

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< p > Guo Tianyong, director of the China banking research center of Central University of Finance and Economics, believes that a weaker level of RMB will help stabilize exports and stabilize economic growth.

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A report by Guotai Junan pointed out that the depreciation of the RMB will enhance the export competitiveness of the US dollar as the main currency, such as containers, ships, pumps, forklifts and other industries. P

The depreciation of RMB will indirectly promote the machinery and appliance industries in the downstream industries of the steel industry. If the export of these industries increases, or the domestic steel market will improve.

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< p > depreciation is also good news for the textile and garment industry which exports more.

A garment foreign trade enterprise salesperson introduced: "the company's export volume last year around 1 million U.S. dollars.

If the current exchange rate is used to calculate, about 1000000 dollars can earn more than 20 thousand yuan.

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< p > < strong > 4 which industries suffer? < /strong > /p >

The depreciation of RMB P has brought about a positive impact on export oriented enterprises, but it has also caused a great impact on other industries.

The first to bear the brunt is the renminbi asset class industry, such as the real estate industry.

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The decline of the RMB exchange rate (P) directly reduced the "margin" space, which is likely to prompt foreign investment fleeing into the Chinese market, making the related asset prices of these funds fall.

The real estate market is the "hot money" favorite place.

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Before P, overseas funds enjoy double benefits of rising house prices and rising exchange rates through holding real estate.

If the RMB enters the devaluation channel, the investment of hot money in the real estate market will shrink, plus the adjustment of the real estate market itself, the "hot money" that chases high returns may be withdrawn, which will lead to a fall in house prices.

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< p > for some energy and raw materials import enterprises, the depreciation of RMB will increase the cost of imports of raw materials, thereby affecting the prices of downstream related products.

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< p > apart from the above industries, some consumer related industries are expected to be affected, such as studying abroad, overseas shopping and tourism.

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< p > < strong > 5 arbitrage trading is stifled. < /strong > /p >

In the past week, the offshore renminbi has fallen by more than 0.8%, which is far more than the depreciation rate of 0.4% on the shore P.

This means that the offshore RMB exchange rate has narrowed, thereby killing the arbitrage of the opportunity to exchange arbitrage.

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< p > a salesperson from an import and export trading company in Shanghai told reporters that if the FOB price of RMB is only 500 basis points lower than the price on shore, deducting the bank charges of about 200 basis points, there will be arbitrage space.

"Assuming that you have 1 million yuan, you can get a credit certificate issued by a bank and get an annual interest rate of 3.5%.

With the credit certificate to the Bank of Hongkong, an equal amount of US dollar loan can be obtained, with an interest rate of 2.7%.

The loan is reconverted into Renminbi and is returned to you by way of "merchandise trade".

The interest rate difference between the two, plus the appreciation of RMB appreciation and the depreciation of the US dollar, will earn more than ten thousand yuan if it changes to a circle.

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< p > according to "financial weekly" reported that some bank branches in Qianhai, Shenzhen, and even specifically pull customers to do the "internal guarantee loan" arbitrage paction, "in Qianhai less than half a year, the company can also get hundreds of millions of loans."

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< p > but after the depreciation of the RMB, the interest rate of the US dollar directly increased by several points, not only without making money, but also losing.

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What is the effect of < p > strong > 6 on investors? < /strong > /p >

Less than P, the most direct hurting is RMB exchange rate investors.

According to the financial times, if the yuan continues to fall, Chinese companies may face billions of dollars in losses due to the complex hedging products.

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P > over the past year, the volume of Renminbi derivatives trading has increased significantly, and investors have been betting on the continued appreciation of the renminbi.

According to Deutsche Bank data, a total of $250 billion worth of derivatives contracts were traded in 2013 years, compared with 800 to 100 billion yuan in 2014.

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< p > some analysts said that the main force of many RMB troops is individual investors and small and medium-sized enterprises.

They buy large structured investment products that can bring huge profits when the renminbi appreciates, but if the renminbi continues to weaken, it will suffer huge losses.

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Geoff Kendrick, director of Foreign Exchange Division of Morgan Stanley, said that assuming that an investment institution has a $350 billion cumulative target redemption forward contract, RMB derivatives will drop by 0.1 every month, which will cause investors to suffer a loss of about 500 million dollars a month. P

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< p > for the investors who purchase foreign exchange financial products, the depreciation of the RMB is a good news.

Reporters in the silver rate network to see, affected by the depreciation of the renminbi, last year's yield less than 3% of foreign currency financial products, the recent part has risen to more than 5%, directly to the RMB financial products yield.

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< p > reporter saw on the home page of China Merchants Bank's financial products homepage. In February 27th, the bank issued the Australian dollar gold rate 286 financial product yield expected annual yield reached 5.2%.

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< p > Ping An Bank, a financial manager, told reporters that the recent accelerated depreciation of the RMB and the increasing demand for foreign exchange by banks are the direct reasons for the rise in volume and price of foreign currency financial products. But in the long run, the recovery of foreign currency financing is mainly based on the prospect of appreciation of foreign currencies such as the US dollar this year.

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Will < p > < strong > 7 continue to "depreciate"? < /strong > /p >

< p > > a href= "http://sjfzxm.com/news/index_s.asp" > RMB exchange rate < /a > the past week has depreciated by nearly 0.8%. How long will the "drop and fall" last? < /p >

Barclay P chief China economist Chang Jian believes that the recent devaluation of the RMB is the central bank's efforts to curb speculative capital flows and reduce potential financial risks, rather than promoting economic growth through the devaluation of the renminbi.

The government does not want to see the continued depreciation of the renminbi and the risk of capital outflow.

Until the real two-way expectations are identified, the RMB exchange rate will face downward pressure in the near future. The central parity of the RMB against the US dollar will reach 5.95 at the end of the year under the continuous influence of trade surplus, foreign direct investment (FDI) inflow and currency inflow.

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Yao Wei, a Chinese economist at faxing bank, also holds the same point of view.

He believes that although the RMB exchange rate has devaluation demand, it may not depreciate too much.

If the offshore exchange rate continues to be lower than the domestic exchange rate, it will be a sign of capital outflow.

Under such circumstances, the people's Bank of China will probably again stabilize the renminbi.

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< p > the report of the strategic planning department of the Agricultural Bank said that the exchange rate trend in 2013 is obviously unsustainable according to the two-way fluctuation of the RMB exchange rate. The parties in the market are very clear about this.

This round of depreciation is a normal pullback.

The recent depreciation of the RMB exchange rate is not the beginning of the sharp depreciation of the RMB, but indicates that the RMB exchange rate will return to the two-way fluctuation trend. This year's exchange rate trend will reproduce the trend of a slight appreciation in 2012.

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< p > Zhu Haibin, chief economist of J.P. Morgan, also expects that the depreciation of the RMB is only a temporary trend, and the rate will be moderate. It will still maintain the forecast of RMB appreciation 1%-2% in 2014.

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