First Quarter RMB Depreciation 2.6% Erase Last Year'S Gains

　　 Short term depreciation aggravate foreign investors' anxiety

In the first quarter of this year, the yuan hit the highest quarterly of 2.6%, and the increase in last year has almost returned to its original form. In the spot market, this week the RMB revalued to the US dollar and remained basically in the narrow range of 6.21-6.22.

In the past, investors are paying the price for the unilateral appreciation of the renminbi.

According to Morgan Stanley and US custodial trusts and Clearing Corp, US commercial bank customers have lost about $2 billion in this year's 332 billion yuan renminbi call option, while Chinese companies have lost 3 billion 500 million dollars in the benchmark 150 billion yuan forward contracts.

Morning Star Inc data show that the size of assets managed by offshore fund companies investing in the mainland of China has shrunk by the most in 9 months in March. The largest 14 assets of these fund companies decreased by 5 billion 300 million yuan in March, the largest month since June.

Fund managers in the industry admitted that at present, the market atmosphere of China's overseas investors has been rising, and the unilateral change of RMB appreciation has led some investors to withdraw from investment related to China. Although in the medium to long term, these investors will return, but in the short term, they will impact the market.

In addition, the reversal of the renminbi's trend may shake the position of RMB as a trade financing currency. At the end of 2013, the World Bank Financial Telecommunication Association released a report that the renminbi has surpassed the euro and has become the second largest trade finance currency in the world. Wen bin, director of macroeconomic research at the International Finance Research Institute of China (2.60, 0.02, 0.78%), said that when the renminbi is no longer appreciated unilaterally, this trend may not continue, and the new ranking changes deserve attention.

Zhou Hongli, an economist at DBS bank, points out that if the RMB continues to appreciate unilaterally, it will only blow up the market bubble. Now the central bank [micro-blog] initiative to "puncture bubbles" is a healthy amendment, which is actually more conducive to the internationalization of RMB.

　　 Medium and long term moderate appreciation accompanied by wave intensification

Analysts pointed out that the recent Renminbi Devaluation trend It has nothing to do with fundamental changes.

"China's macroeconomic data in 1-2 months continue downward, coupled with rigid payment breaks and other negative news, short-term pressure on the RMB trend." China Merchants Bank (9.95, 0.07, 0.71%) senior foreign exchange analyst Liu Dongliang [micro-blog] expects, "with the launch of the reform measures in the third Plenary Session of the 18th CPC Central Committee and the launch of moderate stimulus measures in the two quarter, China's economy will stage stabilization, and the sentiment of empty renminbi will be weakened."

Zhou Hongli said that in view of the fact that the real interest rates between China and the United States will remain at a more attractive level, this will lead to a warming and appreciation of the renminbi over the next 6-12 months, and that the renminbi will still have a high chance of achieving new heights. If the US dollar enters a new cycle of raising interest rates, the real interest rate between China and the United States will gradually narrow down, and the impetus of external funds to RMB appreciation will weaken.

Looking at the longer term, Zhou Hongli believes that the long-term trend of the RMB exchange rate will depend on the economic transformation results and the speed of labor productivity increase, and the long-term and moderate appreciation is still a probability event. "Of course, in the context of the RMB exchange rate mechanism tends to be market-oriented, in the process of mild appreciation, the fluctuation of RMB exchange rate will aggravate, or even stage devaluation."

Liu Dongliang said that the three clues can be used as an important guideline for the RMB exchange rate trend: first, the performance of the US dollar in the international market. With the establishment of the floating mechanism, the RMB will react to the strength of the US dollar; secondly, the change of economic data, which means that the price discovery function of the RMB exchange rate will gradually be reflected; third, the monetary authority's position, and the central bank and other competent departments will publish their views on the exchange rate through public meetings and media interviews, so as to transmit important signals to the market.

　　 Offshore market Active internationalization road long

Although the RMB trend has changed the unilateral appreciation style, the international market is still optimistic about the long-term prospects of RMB, and the construction of offshore RMB market is in full swing.

Recently, China and France agreed to continue discussions on the establishment of RMB clearing and settlement arrangements in Paris, and the German central bank and the people's Bank of China (CBOC) have agreed to cooperate on RMB settlement and settlement payment transactions, paving the way for Frankfurt to become an offshore RMB trading center. At the end of March, the Central Bank of China and the Bank of England signed a memorandum of understanding on RMB settlement and settlement in London. So far, the major financial centres in the euro area have joined the competition for offshore RMB centers.

European pairs RMB The enthusiasm of offshore center is in line with China's original intention. Central bank governor Zhou Xiaochuan has made it clear that China should create conditions for them to carry out offshore renminbi business, "as to whether we can form offshore RMB centers, we must rely on their own efforts and the views of market participants".

Fu Peng, President of China's macro hedge Research Institute, predicts that the territory of the offshore RMB market has been rolled out. The next step is to accelerate the liberalization of capital account and expand the investment and use channels of offshore RMB. "It is expected that the stock market and bond market will be liberalized first and the interbank market will stay behind."

With the promotion of RMB internationalization, the prospect of RMB as reserve currency is also valued by all parties. The Australian International Finance and Supervision Center issued the latest report that China will accelerate the liberalization of capital market and foreign exchange market, such as the pilot reform of financial reform in Shanghai free trade area, which will make RMB become the main reserve currency in 10 years.

"The above judgment is not impossible, of course, the road to internationalization of RMB is still very long. At present, the renminbi as a trading currency and financing currency accounts for a big drop behind the US dollar." Zhou Hongli said, "the positive aspect is that a breakthrough in overseas RMB investment has emerged, and the next step is how to expand its quota and scale."