The RMB And The US Dollar Are In A Stalemate.

　　 RMB two-way volatility into normality

According to China foreign exchange Trading center data, since mid February this year, the RMB exchange rate has gone through a cycle of depreciation, which has fallen by more than 2.5%. In March 17th, the central bank announced that the floating rate of RMB to us dollar trading in interbank spot foreign exchange market will be expanded from 1% to 2%. Since the beginning of this week, the RMB exchange rate has risen slightly. On the 11 day, despite the poor performance of China's foreign trade data in March, the central parity of the RMB against the US dollar still edged up by 15 basis points.

Lu Lei, President of Guangdong University of Finance, believes that the recent trend of RMB exchange rate is caused by market judgement, and the volatility is small and normal. He said that the two-way fluctuation of the RMB exchange rate will be a normal phenomenon in the future.

Ding Jianping, director of the modern financial research center of Shanghai University of Finance and Economics, said that at the beginning of the year, the domestic economic environment such as the decline of domestic exports, the continuous decline of PMI in manufacturing industry, the default of trust products, the exposure of bond market risks and other weak domestic economic environment, together with the recent Federal Reserve's reduction in the scale of quantitative easing and the expected increase in interest rates, had hit the domestic financial system to a certain extent, and also made the RMB short term facing devaluation pressure.

In addition, since the sharp depreciation of emerging market currencies since May 2013, it is difficult for the renminbi to "remain single". In particular, the India rupee has accumulated more than 30% depreciation. Argentina's currency has accumulated more than 20% depreciation in the short run. The devaluation of the Indonesian rupiah has also been nearly 20%. Under the background of the widespread depreciation of foreign currency, the renminbi will inevitably encounter a "shock wave".

Zhou Xiaochuan, governor of the people's Bank of China, said at the Boao forum for Asia held recently that the RMB exchange rate formation mechanism is constantly being reformed. In the future, the RMB exchange rate will be determined to a greater extent by the market and gradually withdraw from normal foreign exchange intervention.

　 　 RMB The situation is still weak.

Most of the surveyed experts predict that in the long term trend, many factors supporting the appreciation of the renminbi over the past ten years are disappearing and reversing. For example, the current account surplus is narrowing, the US dollar vulnerable period is coming to an end, and the capital outflow control is gradually liberalized. In addition, from 2011 to 2013, China's current account surplus accounted for less than 3% of the GDP ratio for 3 consecutive years. This means that China's current account has been basically balanced, and the renminbi does not have the conditions for significant depreciation or appreciation in the short term.

Gao Shanwen, an analyst at Anxin securities, believes that the rapid devaluation of the renminbi may be over in the short term, but the renminbi is still in a relatively weak position. The short-term weakness of the renminbi may end with the stabilization and improvement of the economy. As the economy stabilizes, private sector investment is likely to rise again, and short-term interest rates begin to stabilize.

In the short term, the elasticity of RMB exchange rate has increased, making it more difficult for foreign trade enterprises to make decisions. Some bankers suggest that enterprises need to change their ideas and start from the business point of view to lock in the cost or earnings of the collection and payment in advance, so as to concentrate on the development of the main business.

　　 capital account Convertibility reform can not be achieved overnight.

Under the background of the two-way fluctuation of RMB exchange rate and the accelerated pace of marketization, capital account convertibility reform as a substantive step of reunification has attracted much attention. Experts interviewed believe that capital account convertibility reform is a relatively long process and can not be accomplished overnight. In the case of Thailand in the Asian financial crisis in 1997, opening capital account under a fixed exchange rate would bring disastrous risk due to the lack of a mechanism for managing cross-border capital flows.

"The last round of RMB devaluation is precisely the test of the tolerance of RMB exchange rate volatility, which can lay a solid foundation for the reform of capital account convertibility, improve the acceptance of RMB in the international market and accelerate the pace of RMB going out." Lu Lei said.

Experts said that promoting RMB capital account convertibility can be carried out step by step. First, liberalization of long-term capital flows, and then release of short-term capital flows; first, liberalization of direct investment and liberalization of indirect investment; first, liberalization of inflow, and then release of outflows; at the same time, we should press ahead with relevant reforms in commercial credit, debt securities, stock and securities trading.

In fact, in 1996, after the realization of RMB's current account convertibility, RMB capital account convertibility has been steadily advancing. For example, with the opening of capital market as the key point, the convertibility of securities investment items should be further increased; further expansion of QFII, QDII and RQFII degrees, appropriately reducing the "threshold" for qualified foreign institutional investors to enter the domestic capital market; allowing foreign institutions to remit the renminbi funds collected by foreign institutions to repatriate them; expand the autonomy of residents' personal remittance, further relax the cross-border transactions of personal capital items, and allow domestic residents to invest in overseas industries and securities.

Market analysts pointed out that how to prevent the impact of international hot money and international speculative capital on exchange rate is a major problem after RMB capital account convertibility. RMB capital account convertibility does not mean that the control of cross-border capital flows can be completely lifted, and capital management can still be retained. Especially when the financial sector is under the impact of cross-border capital flows or a serious imbalance of international payments, macro prudential measures and necessary temporary control measures can be adopted.