Interpretation Of The Reasons For The Sudden Regression Of RMB International Usage Ranking

To achieve the internationalization of RMB, it is very important to maintain the relative stability of the RMB exchange rate. The fact that the international ranking of RMB in February is falling is a counter argument to this view. Let's take a look at the detailed information.

According to the latest data released by SWIFT, the amount of RMB used as international payment currency dropped from fifth to seventh in February 2015, ranking behind the US dollar, euro, pound sterling, Japanese yen, Swiss franc and Canadian dollar.

For February

The main reason for the regression of international usage is the holiday factor.

In February this year, China's most important traditional festival, the Spring Festival, has only 17 actual working days in February, which is 19% lower than the 21 working days in January, and less working days will naturally affect the volume of business.

The World Bank Financial Telecommunication Association has not announced all kinds.

The specific scale is only given the proportion, which makes it impossible for us to calculate.

The magnitude of the decrease in usage is basically the same as the decrease in working days.

However, we can still find some evidence.

One evidence is that the Hongkong Monetary Authority provides RMB cross-border trade settlement data. In February 2015, the total amount of RMB cross-border trade remittance in Hongkong amounted to 462 billion yuan, down 15.7% from the 548 billion yuan in January.

Another proof is that the foreign exchange data of domestic market announced by the State Administration of foreign exchange.

In March 31st, the data released by the foreign exchange bureau showed that in February 2015, the RMB foreign exchange volume in China's foreign exchange market was US $861 billion 500 million, a decrease of 25% compared with the US $1 trillion and 160 billion in January.

In February 2015, the decrease in the volume of the above two business pactions was basically the same as the decrease in international usage of RMB.

Accordingly, it can be speculated that the reduction of working days caused by the Spring Festival factor is indeed one of the important reasons for the decline in the international use of RMB.

In January 30, 2015, the spot exchange rate of RMB against the US dollar was 6.2510 yuan in the domestic foreign exchange market, and it was reduced to 6.2730 yuan in March 2nd and 0.35% in the current month.

In that month, the depreciation rate of offshore RMB exchange rate was more obvious than that in China.

During this period, similar reports were frequently seen in the central bank, such as the central bank's comprehensive reduction of Renminbi and the sharp fall of the renminbi, which highlights the devaluation pressure and obvious devaluation expectations of the RMB exchange rate.

The devaluation of the RMB exchange rate is expected to affect the willingness of the economic entities to hold Renminbi.

In terms of norms, the demand for RMB by offshore economic entities can be simply summarized into three types: preventive demand, paction demand and speculative demand.

In some cases, speculative demand may dominate.

Taking offshore renminbi deposits in Hongkong as an example, the change of its balance represents the enthusiasm of overseas holders to hold RMB deposit assets, which can be used to measure speculative demand to a certain extent.

Under the condition that deposit interest rates keep below 1%, the balance of offshore RMB deposits can be increased from 10 billion yuan in the early stage of business development in 2005 to 103 billion yuan in July 2010, largely due to the speculative demand brought about by the appreciation of the renminbi.

However, according to the latest data released by the Hongkong monetary authority, the balance of RMB deposits in Hongkong was 970 billion 300 million yuan at the end of 2 in 2015, which declined for two consecutive months, a decrease of 33 billion 300 million yuan compared with the highest level of 10036 billion yuan at the end of 12 last year.

This shows that the recent depreciation of the renminbi also has a negative impact on the willingness of the economic entities to hold renminbi assets.