The Renminbi Is Short And The Exchange Rate Is Rising.

The recent increase in the elasticity of the RMB exchange rate has not caused significant fluctuations in derivatives such as swaps and options, indicating that the market has gradually accepted the increasingly market-oriented RMB exchange rate.

Despite the eventual defeat of several rounds of competition with the Central Bank of China, the stability of the renminbi also consumed a huge amount of foreign exchange reserves.

China's foreign reserves fell by more than US $400 billion after the 8.11 yuan reform last year triggered a marked depreciation of the yuan.

"Now

It is clear that the middle price is normal at 200 points a day. The policy intention for speculation is not as urgent as before. Before the market pricing mechanism is unclear, we are more speculating through the change in the intermediate price.

Liu Dongliang, senior analyst at information management department of China Merchants Bank, told Reuters.

Data show that in the 63 trading days after the Spring Festival, the RMB against the US dollar fluctuated more than 150 points in 20 trading days, accounting for over 30%, while in the 16 trading days since late April, more than half of the trading days.

The fluctuation is more than 150 points.

However, after the Spring Festival, the performance of the RMB related derivatives market was basically stable, and the implied volatility of the US dollar / RMB parity options fell sharply. The volatility of the one-month option fell from 5.3 to 3.3, and the US dollar / Renminbi one-year swap point dropped from 900 to 770, and the lowest point was down to 500.

In addition, in the past two months, external storage continued to stabilize, though deducted.

There may still be a slight deficit after the conversion, but it has improved significantly compared with the previous period. The data on the sales and sales of the depot have also been improved, indicating that the market sentiment has obviously eased.

Xie Yaxuan, chief macroeconomic analyst of China Merchants Securities, also believes that "guess mom is better than guess aunt".

He pointed out that if the RMB exchange rate fluctuates, the more reliable way to analyze its trend should be to analyze the change of supply and demand in foreign exchange market and the change of participants.

At the end of April, the central bank and the safe issued the circular on the implementation of macro Prudential Management of cross border financing across the country and the notice to further promote trade and investment facilitation and improve the authenticity audit, continue to take measures to prevent and control international capital outflow, expand capital inflow channels, ease bank's hands and feet, and promote active interbank foreign exchange market.

In addition, the people's Daily published an authoritative article on China's economy on Monday, saying that while maintaining a basically stable exchange rate, a mechanism of exchange rate operation based on market supply and demand, and a two-way floating and flexible exchange rate has been gradually formed.

The article also said that "foreign exchange market should be based on improving the autonomy of monetary policy and giving full play to the automatic adjustment mechanism of balance of payments".

"This statement has been very clear, in the future, whether the renminbi depreciates or revalues pressure, as long as it is in line with the laws of the market, it can be released."

Liu Dongliang believes that the RMB exchange rate index is also a little away from 100. Even if the US dollar is strong again in the future, there will be some room for release.