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The Weakness Of The Renminbi Is Hard To Change In The Short Term.

2014/6/6 9:16:00 18

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 in the background of the nearly three month high of the overnight dollar index rose to 80.66 points, on the 5 day, the RMB exchange rate with the US dollar did not unexpectedly drop slightly again. According to the China foreign exchange trading center, the RMB exchange rate against the US dollar in the inter-bank foreign exchange market was 6.1708 at the 5 day, and fell by 15 basis points. It continued to linger around the low point of nearly nine months since September 9, 2013. 
In the P foreign exchange market, on the 5 day, the RMB against the US dollar still failed to get rid of the slight weakening trend at the recent stage, and it was once again closed down after a narrow shock all day. Data show that, on the 5 day, the RMB against the US dollar spot exchange rate opened 26 basis points at 6.2530, the lowest to 6.2557 throughout the day, up to 6.2497, closing at 6.2548, down 44 basis points or 0.07% from the previous trading day. At the closing price of 6.2548, the spot exchange rate of RMB is still further approaching the lows of the 6.26 front-line. 
 in the offshore CNH and NDF markets, the RMB CNH spot rate and RMB 1 year forward NDF exchange rate in recent trading days also fell synchronously with the domestic market, both of them are running near 6.26. 
 weakness or continuation 
 for the recent continuous depreciation of the RMB, the view of "a href=" //www.sjfzxm.com/news/index_c.asp > market mainstream < /a > is that although the power of buying large quantities of state-owned enterprises from the end of 5 has boosted the decline of the "a" href= "//www.sjfzxm.com/news/index_c.asp" > spot exchange rate < /a > to a certain extent, the fundamental factors of the recent period may be the main reason for the RMB exchange rate to continue to oscillate and fall. 
 the latest statistics released by the central bank this week show that in April, the new central bank's foreign exchange quota was only 84 billion 600 million yuan, a sharp drop of more than 50% in the ring. In the same period, all foreign financial institutions increased their foreign exchange reserves to 116 billion 900 million yuan, creating a new low of nearly 8 months. In the light of the data that the commercial bank's foreign exchange surplus dropped to US $9 billion 700 million in April, the characteristics of market participants' willingness to settle foreign exchange in the two quarter have been very obvious. On the one hand, concerns about the momentum of China's economic recovery have slowed down the inflow of foreign capital and promoted the expectation of RMB depreciation. On the other hand, the devaluation of the RMB against the US dollar has resulted in a decline in the willingness of domestic enterprises to settle their foreign exchange. 
 there is a market view that, with the gradual expansion of the real economy, the monetary authorities are happy to see that the RMB exchange rate continues to be weak at this stage, so as to boost the growth of the import and export sectors. At the same time, the European Central Bank's new round of easing measures, which is already in the "corner", may also pry up the strength of the US dollar in the medium and long term. Once the US dollar gradually becomes stronger, the RMB exchange rate will probably come down. 
 analysts said that in the context of macroeconomic fundamentals or continued weakness and the need for further easing of policy stimulus, the current weakening of the renminbi is still expected to be difficult to reverse and the US dollar index or stage strength is strong, the weakening of the RMB exchange rate is expected to continue in the coming period. In fact, at the beginning of the year, some foreign institutions which had optimistic views on the appreciation of the RMB would still be looking ahead to the expected performance of the RMB exchange rate throughout the year. For example, UBS recently indicated that the RMB exchange rate is expected to remain at a low level near 6.25 in the year.