RMB Spot Exchange Rate Hit Two Years Low

The central parity of RMB against the US dollar dropped by 96 basis points to 6.1475, a nearly four month low.

The spot price opened at a low price of 101 basis points, followed by an intermediate price of 6.2690.

At the close, the price of RMB against the US dollar was 6.2696, down 107 basis points, and hit a new low for more than two years.

Traders say the weakening of the renminbi is a reaction to the overnight dollar index's strong rise to a 1 month high. It should not be read over. The key to the future is to see the middle price.

"On the shore, the RMB against the dollar approached the limit several days ago, and the overnight dollar also strengthened, so the central bank sharply lowered the intermediate price on the 27 day."

Liu Dongliang, senior analyst at China Merchants Bank financial market, said that the US dollar is expected to remain strong in the short term and maintain its judgement of RMB exchange rate falling to 6.35 this year.

In recent years, the data of foreign exchange settlement and sale of commercial banks have shown a continuous deficit, indicating that there has been a profound change in the supply and demand pattern of the RMB exchange market, and the willingness of the market participants to increase their exchange rate has increased.

Liu Weiming, a financial market expert at CITIC Bank's head office, said it is foreseeable that the fall of the renminbi will last for 3 to 5 years.

In recent months, the willingness of people and enterprises to increase their remittance has increased, and obvious signs of withdrawal of hot money are evident.

The pressure on the yuan to continue to fall this year is enormous.

With the advance of exchange rate marketization, the central bank intervened in RMB exchange rate less and less in recent year, but this does not mean that the central bank will not play a role in the fluctuation of RMB.

At present, China has a managed floating exchange rate system.

When the volatility is too intense for China's financial security, the central bank will certainly "sell".

In the short term, the renminbi will probably maintain a moderate upward or downward trend, even with a short-term upward trend.

But the general trend is still going down in the future.

On the one hand, China

Faced with deflation pressure, exports are subject to

On the other hand, in the context of the long-term rise of the US dollar, the sharp fluctuation of the RMB is not good for China's economy.

Internationalization requires the RMB exchange rate to remain relatively strong, which will make the RMB exchange rate weaken collectively in the future. In addition, the speed and extent of softening will not be too fast. This is also a requirement for the stability of China and Asia, and also a stable requirement for RMB internationalization.

Liu Weiming believes that, in general, the RMB exchange rate will not fall too far this year. The possibility that the RMB will fall to 6.5 - 6.8 or even lower against the US dollar in 3 to 5 years will exist.

But this decline is still relatively small compared with other countries, and the renminbi remains a strong currency.