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The Market Counterattack "Underestimation": The Yuan Depreciated More Than 100 Points Yesterday.

2011/10/14 13:32:00 34

After the US Senate voted to pass the RMB exchange rate bill, the renminbi has continued to depreciate against the US dollar in the past two days, thanks to the US dollar hedging buying.

Yesterday (October 13th), the central parity of RMB reached its biggest reduction in 11 months.

The previous day, the central parity of RMB against the US dollar fell by 115 basis points after the passage of the bill.

The exchange rate and trade concerns are self-evident.

The reporter was informed that the foreign trade data released yesterday by the General Administration of Customs showed that in September,

Exit

The ratio of both rings decreased.

In this regard, CICC said that the slowdown in the US and EU economic growth slowed down the growth of imports and exports, and expected to maintain a favorable balance in the coming months, but the annual surplus will be lower than that of last year.

The central parity of RMB will fall again.

Before the release of the foreign trade data, the central parity of RMB against the US dollar was set at 6.3737 yesterday, a sharp decrease of 139 basis points, or 0.22%, from the 6.3598 of the previous trading day, the largest reduction since November 2010.

Since 11, the US Senate has passed the renminbi.

exchange rate

After the bill, the three departments of China's Ministry of foreign affairs, Ministry of Commerce and central bank rarely focused on vocal protest.

On the market side, the central parity of RMB has plummeted for two consecutive trading days, with a drop of more than 100 basis points.

The import and export data released by the General Administration of Customs yesterday showed that China's export growth in September dropped to a new low since February 2011, while exports in September increased by 17.1% over the same period last year, lower than the previous 20% increase in the market, while exports in August increased by 24.5%.

Over the same period, a trade surplus of $14 billion 510 million was also recorded, which was also lower than the median of $16 billion 300 million expected by the market.

Lu Peijun, deputy director general of the General Administration of customs, said at a news conference that the fluctuation of RMB exchange rate will inhibit the growth of foreign trade export.

However, the reporter noted that on Wednesday, in the offshore renminbi (CNH) market of Hongkong, the spot rate of RMB against the US dollar was once reported at 6.5463 yuan, which is 1828 basis points different from the spot closing price in the CNY (RMB) market, which is equivalent to 2.8% depreciation.

Bloomberg statistics show that in the past month, the RMB exchange rate in Hongkong has been 1% lower than that in the mainland.

For the CNY market, the RMB exchange rate is stronger than the CNH market and the price gap continues to expand. Qu Hongbin, chief economist of HSBC China, believes that the CNH market is more dependent on capital inflow and economic fundamentals, and political factors have limited impact on the CNH market.

However, under the risk of two bottoming out in European and American economies, politicians in Europe and the United States have been pointing their finger at the fall of the renminbi, attempting to divert their domestic vision and implement trade protection measures.

After the US Senate voted to pass the exchange rate bill yesterday, EU Trade Commissioner DeGucht said in a speech in South Korea that China's currency exchange rate can not reflect economic reality.

Big appreciation is unlikely.

CICC yesterday released a report that the slowdown in US and EU economic growth has led to a decline in import and export growth and is expected to maintain a favorable balance in the coming months, but the annual surplus will be lower than last year.

As a result, the flexibility of RMB increases, and the possibility of substantial appreciation is not great.

The report argues that because of the uncertainty of the domestic exchange rate fluctuations, it is unlikely that the renminbi will appreciate substantially in a basket of currencies.

A substantial appreciation of the exchange rate is not a major option against imported inflation.

The RMB exchange rate against the US dollar is expected to rise 5%~7% in the year to 6.23% at the end of the year.

In Qu Hongbin's view, China's

Balance of trade surplus

In the past few years, there has been a marked decline. In the first half of this year, the trade surplus accounted for about 2% of GDP and the current account surplus was only 2.8%, much lower than that of 8%~9% before the financial crisis in 2007.

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He said that China's trade has entered a basically balanced range. In this sense, the RMB exchange rate has been very close to the market equilibrium exchange rate, the RMB has not been underestimated, and there is no need for further appreciating.

The US dollar bill will not have any effect on the future trend of the renminbi.

In view of the expectation of RMB depreciation in the recent market, Qu Hongbin believes that China's economy is still growing at a high speed, and foreign capital continues to flow into China. It is hard to see that the RMB will depreciate in advance in the short term. There will be no appreciable appreciation of the renminbi, nor will it depreciate, and it will enter a stable interval.

He also said that the recent US bill on the RMB exchange rate was purely political.

Wen Tianna, managing director of China Merchants Securities in Hongkong, believes that global investors have seen the problems of China's economy. It is not wise to let the renminbi accelerate appreciation now. "The idea of creating jobs through RMB and helping economic development may be in the US state-owned market, but there is no law investor to believe it."