Zhang Monan: The Risk Of Continued Devaluation Of The RMB Should Not Be Underestimated.

Since the middle of February, since the middle of February, the RMB exchange rate and offshore market RMB exchange rate have changed in recent years. In the past few years, the exchange rate of RMB against the US dollar has dropped continuously in the middle price, especially after expanding the floating range of RMB exchange rate. The fluctuation of the central parity of the US dollar against the US dollar has increased and reached a new low in the year. The decline has reached about 2.3% since mid January.

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< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > RMB > /a > the trend of "reversal" was once interpreted by the market as the result of "central bank [micro-blog] active intervention".

In fact, in the process of devaluation, the central parity of RMB is lower than the spot rate, indicating that the central bank's policy is more inclined to control the depreciation rate of the RMB exchange rate, rather than the central bank's initiative to guide currency devaluation, but more from the global liquidity and the impulse impact of the Fed's QE.

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The impact of pulse P has already appeared in other emerging economies.

In late January, when the United States announced its plan to reduce QE for the second time, the emerging country currency market represented by Argentina Peso was hit hard.

Large scale asset sell-off is staged in emerging markets such as Argentina, Turkey and South Africa. This is the second wave in emerging markets from 5 to June in 2013.

Today, the continued decline in the renminbi on the offshore market, to a large extent, also indicates that the third wave of QE withdrawal from the US Federal Reserve is like ripples and waves.

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< p > the offshore market, which is based on the three indicators of cross border trade of RMB, RMB < a href= "//www.sjfzxm.com/news/index_c.asp" > deposits "/a" and RMB bonds, is relatively small, and is more vulnerable to the impact of cross-border capital flows across the globe. Offshore renminbi is the first to bear the brunt. The offshore market has fallen to the lowest level in the 8 months since the yuan against the US dollar, indicating that the offshore renminbi position has been significantly reduced, and the depreciation expectation is beginning to take shape.

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< p > anticipation is largely rigid. Once expected, it is difficult to change in a short time.

The Fed's latest interest conference, which controls the global currency "total valve", shows that the Federal Reserve once again reduced the scale of bond purchases. In April, it began to reduce the scale of monthly asset purchases from 65 billion US dollars to 55 billion US dollars, and may start the rate raising process in early 2015.

The narrowing of China US interest rate and exchange rate will further lead to capital outflow.

In view of the core role of the US dollar in determining global liquidity, it is expected that in the next period of time, the decline of the foreign exchange center will inevitably lead to a decline in the water level of China's "pool of funds". The function of water storage through foreign exchange channels has always been pformed into a leaky function, which will change the main channel of China's currency creation, and further aggravate the pressure of RMB depreciation and the worries of the outside world on China's economy.

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< p > in fact, for countries with less than a href= "//www.sjfzxm.com/news/index_c.asp" and emerging market < /a >, the fragility of the financial system and the completely floating exchange rate mechanism have increased the exposure of risks. Some countries with a high proportion of foreign debt and a shortage of foreign exchange reserves may even suffer a "macro run" like a bank run in this case.

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< p > short term fluctuation of exchange rate is a very dangerous signal.

In the past two years, short-term speculative capital and the rise of RMB arbitrage have accumulated a lot of risks and should not be underestimated.

The monetary authorities should strengthen the management of exchange rate fluctuations in offshore markets and onshore markets, pay close attention to the impact of RMB depreciation and the possible chain reaction, avoid falling cliff prices and massive capital outflows. We should consider the imposition of Tobin tax, strengthen the security precaution mechanism for capital flows, and earnestly safeguard China's financial stability and financial security.

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