RMB Exchange Rate: Return To Mainstream, No Longer Appreciate

Speaking of the trend of the RMB exchange rate, people often consider only from the perspective of China's economy and policy, and rarely assess the RMB exchange rate in the perspective of the global foreign exchange market. Because we have a simple consensus that since China's exchange rate formation mechanism has not yet been fully marketed, it will not have much practical significance to put the RMB exchange rate in line with the other currencies that have been opened up.

However, in the era of economic globalization, the RMB exchange rate, which is jointly promoted by government guidance and market expectations, can not be completely decoupled from the mainstream of the exchange market. The effect of the direction of the global foreign exchange market on the RMB exchange rate can be clearly explained.

The real effective exchange rate index and the nominal exchange rate of RMB since 2005 calculated by the bank for international settlements are compared. It can be clearly seen that the appreciation trend of the RMB real effective exchange rate with a basket trading partner rate began in 2008, and the appreciation of the nominal exchange rate of RMB against the US dollar started in July 2005.

Moreover, in the past 2008-2010 years, when the exchange rate between the RMB and the US dollar was basically stable, RMB The effective exchange rate has fluctuated greatly. Although the nominal exchange rate appreciation has slowed down since 2012, the effective exchange rate has accelerated significantly.

The difference between the real effective exchange rate of RMB and the trend of nominal exchange rate fully shows that the trend of global foreign exchange market will still have a significant impact on the overall value of RMB through the change of other non US currencies and the US dollar exchange rate.

If you put it in a global perspective, the RMB from 2005 to 2011. appreciation It is not a phenomenon of maverick, but a member of the emerging economies in the weaker dollar cycle.

From a global perspective, the appreciation of the renminbi in the middle of 2011 has made the RMB exchange rate separate from the non US currency camp weakened by the gradual weakening of the US dollar. It has gone out of its unique market. It is against the backdrop of the stronger dollar that the RMB has been strengthened strongly, which has led to an obvious acceleration of the effective exchange rate of RMB in 2012.

From the whole world Exchange rate market From the linkage point of view, the appreciation of the RMB exchange rate began in the middle of 2011, which made the RMB out of the mainstream of the stronger currency exchange rate in the emerging market.

A wave of depreciation started in 2014 only made the RMB exchange rate properly "international". At the moment when the possibility of a significant depreciation of the US dollar is narrowing, the mainstream of the global foreign exchange market restricts the continued appreciation of RMB.

In the context of the ebb tide of the US dollar and the US dollar, the continued appreciation of the RMB will bring more pressure to China's foreign trade and capital flows than the subprime crisis. It is not easy to maintain the high volatility and not follow the mainstream of the weakening of the non US currency.