The Logic Of Judging Whether Monetary Authorities Exert Their Influence On Their Own Initiative

< p > according to the current opening degree of China's current account and capital account, foreign exchange mainly flows into China through the following ways: one is foreign exchange earnings generated by foreign trade under current account items, the net inflow scale is roughly a trade surplus, foreign direct investment inflows into China's foreign exchange earnings, and foreign exchange inflow formed by QFII's investment in China's capital market.

In these three main ways, QFII is smaller, < /p >.

< p > up to July 30, 2014, the investment quota of QFII was only 57 billion 898 million US dollars, while in 2013, the trade surplus was 259 billion 753 million US dollars and the foreign direct investment amount was 117 billion 586 million US dollars.

In terms of foreign direct investment and trade surplus, foreign exchange inflows generated by foreign direct investment were larger before 2005. After 2005, the trade surplus generated the first channel of foreign exchange inflow.

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In terms of foreign exchange settlement, since 2007, < a href= "http:// www.sjfzxm.com/news/index_c.asp" > current account < /a >, enterprises can independently retain foreign exchange according to their operating conditions, but the settlement of foreign exchange by QFII and foreign direct investment is still strictly managed.

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< p > because the overall scale of < a href= "http:// www.sjfzxm.com/news/index_c.asp" > QFII < /a > is relatively small, so in the follow-up analysis, we mainly consider the foreign exchange inflow caused by foreign direct investment and trade surplus.

After clarifying the main channels of foreign exchange inflows, we can judge whether the people's Bank of China has taken the initiative to influence the exchange rate according to the following path: if the trade surplus and foreign direct investment show < a href= "http:// www.sjfzxm.com/news/index_c.asp" > foreign exchange < /a > inflow into the territory, there will be a larger demand for settlement, that is, enterprises need to sell foreign exchange and buy Renminbi.

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According to the above analysis of the level of foreign exchange market, we can envisage the potential route of exchange settlement to the behavior of exchange settlement: the enterprise sells foreign exchange to the bank first, and then sells the foreign exchange position which is not willing to hold to the people's Bank of P.

In this process, the people's Bank of China is the last buyer of foreign exchange, which is confirmed by the growing growth of foreign exchange reserves in China.

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< p > but if the data of foreign trade surplus and foreign direct investment show that there is foreign exchange inflow and the foreign exchange balance does not rise or fall, it shows that the people's Bank of China also sells foreign exchange in the interbank market. This behavior will undoubtedly increase the volume of foreign exchange sales, guide the formation of a lower intermediate price and promote the appreciation of the people. Similarly, if the increase in the foreign exchange balance is much higher than the actual inflow of foreign exchange, then the people's Bank will guide the market to provide the amount of foreign exchange that will go far beyond the current foreign exchange inflow with corresponding prices, thereby forming a higher middle price and promoting the depreciation of the RMB.

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