Hu Yuexiao: What does the course of the RMB exchange rate of 7 do not break?In the exchange rate target system, it is an important bottom line to prevent the market from forming continuous depreciation.
Since the reform of the 8.11 exchange in 2015, the RMB exchange rate has exceeded 7.0.What will happen in the future?
The instability of the RMB exchange rate is expected
Looking back at the process of depreciation of the RMB exchange rate, comprehensive perspective, obviously the changes in China's economic prospects are the basis for determining the two -time depreciation of the RMB exchange rate to nearly 7.0.During the end of 2016, the strong expectations of the RMB exchange rate broke the seven was due to the high start of the property market at that time, and the market's concerns about China's economic transformation and growth prospects.Keep the exchange rate loses the property market.Some institutions on the Chinese property market and exchange rates, and the prospects of China's economic prospects believe that it is difficult for the Chinese property market and the foreign exchange market to hold, and policy resistance is only for the Chinese economy.
In the third quarter of 2018, the RMB exchange rate was once again faced by the seventh expectation, which originated from concerns about the intensified trade dispute between China and the United States. This kind of concern affects the market's expectations of China's economic prospects, which has caused a series of related reactions.The risks of risk exposure are strongly heating up. Among them, the depreciation of the exchange rate is a form of risk exposure. Through the self -implementation mechanism of market expectations, it has affected the exchange market.
However, the depreciation trend of the two RMB exchange rates was abruptly stopped when the market was facing a strong breakthrough expectation, and it recovered again.It can be said that the two depreciation process of the RMB exchange rate shows a typical wave of three tortuous features: depreciation in 2016, rising in 2017, and depreciation in 2018.From 2016-2018, the unilateral unilateral rise or depreciation trend of the same year will be present every year, that is, in the process of ascending or derogation, there is basically no sideways sorting.The equilibrium point has not been formed. The RMB exchange rate does not know which interval is the market equilibrium area, that is, the resistance level and support level of the market operation itself, which is far from forming, indicating that the RMB exchange rate market is still a market that needs to be precipitated and mature.
This is different from the international balance of international currencies such as the US dollar, the euro, and the yen. There is a historical balance area operating in the market, which is fundamentally different, which means that the RMB exchange rate is more likely to form unstable expectations in the market.
However, the author has always asserted that China has implemented a management floating exchange rate system. In the language of the market, it is the exchange rate of control. When the capital items are not open, the exchange rate control is effective, that is, the government has absolute exchange rate direction.Control.The course of the RMB exchange rate is nearly 7 without breaking the process. In the target system of the Chinese currency authorities' exchange rate policy, preventing the market from forming continuous depreciation expectations is an important bottom line for exchange rate management.
Policies of RMB exchange rate management in 2019
The People's Bank of China stated at the two sessions that the exchange rate will not become a tool for trade disputes, and resolutely do not engage in competitive depreciation; adhere to the market supply and demand -based exchange rate formation mechanism to tolerate market fluctuations and a certain degree of flexibility.Regarding the market exchange rate level, the central bank believes that the exchange rate is now becoming more and more stable.The author believes that from the actual trend of the exchange rate, the market equilibrium range of the RMB exchange rate is obviously not at the current point: from February 11th to March 12th after the Spring Festival, the right-term exchange rate of the RMB against the US dollar is 6.78-6.68, which continuesThe downward trend of step -by -step and step -level downward trend since November 2018!
According to the central bank's latest monetary policy implementation report (2018 Q4), the goal of the exchange rate policy is to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.From the description of the stability of exchange rates at the two sessions at the two sessions, the exchange rate is stable = market fluctuations+automatic stability.But where is the balance point?
The exchange rate must converge at the stable point in fluctuations, which means that the exchange rate is a balanced point in the market, but in terms of the existing market trend history, the RMB exchange rate is unlikely to have a relatively stable and consistent balance of mainstream expectations.There is no balanced operating area that the market is consistently expected.
History does not form and does not mean that the market does not exist.Then whether the RMB exchange rate has an objective balance point, like the gravity of the earth, attracts the RMB exchange rate to it, and in the case of the stability of the world economy and international finance, can it converge this?From the analysis of economics, the purchasing power parity (PPP: Purchasing Power Parity) is a more suitable indicator for measuring the actual purchasing power of the two currencies.And the national economic statistics under the exchange rate law every year are announced.
However, from the perspective of the trend of market exchange rates and PPP, the market exchange rates (including RMB exchange rates) of various countries have not surrounded the trend of PPP fluctuations.Even from the long -term volatility of market exchange rates, there is an international currency in obvious balanced areas. The relationship between market exchange rates and PPP is unstable, and jumping fluctuations often occur.
It can be seen that from the perspective of market operation itself, the exchange rate formation mechanism must achieve automatic balance effect, which is quite difficult.As an important area of the financial market, the exchange rate market has the operating characteristics of all financial markets: it is expected to automatically prove, and the price continues to move continuously under the expected action until the expected reversal.It can be seen that in the exchange rate market, it is more important to be expected to maintain the value of monetary value.
Whether in 2016 or 2018, the renminbi continued to depreciate at that time. Only under the tolerance of the Chinese currency authorities could it happen.The Chinese financial system is a bank -led financial system. Compared with the market -oriented financial system, the bank -leading financial system has a more direct and significant impact on the credit creation of the financial system, so it is also more controllable.Although China's interest rate marketization process has achieved a large process, the market interest rate system is basically directly around the currency authorities, and the interest rates have a long way to go.At the same time, the interest rate system in the credit market is also deeply affected by policy interest rates (benchmark interest rates).
In 2016, the original intention of the central bank to allow the exchange rate depreciation was to hope to increase the market volatility of the exchange rate and increase the marketization of the exchange market. In 2018, the allowance of exchange rate fluctuations is to reduce the direct impact of the deterioration of the trade environment on the foreign trade enterprises and the Chinese economy;However, when the depreciation process of the two times affects market expectations and the continuous depreciation expectations of market formation policies, the currency authorities have adopted a counter -cycle adjustment, and they have successfully reversed the trend and expectations of the market exchange rate.The policy purpose of improving the marketization of the exchange market is to create a favorable exchange rate management market environment for enterprises.This policy purpose will continue for a long time and continue to be implemented in 2019.
In 2019, the RMB exchange rate will change to the unilateral appreciation again
From 2016 to 2018, the RMB exchange rate has undergone a three-stage change of derogation-ascension-derogation, and it is basically one-way sport in the year.Live the trend of the previous three years, from January to March 2019, the RMB exchange rate showed a significant one-way appreciation trend.The author believes that based on changes in the international economy, finance, and policy and political environment, the RMB exchange rate in 2019 will show a continuous appreciation trend of unilaterally. After the 8.11 exchange reform, it has been broken in 2016 and 2018.Reappear!
In 2019, the Chinese economy will show a good situation in the landscape of the world economy.China's economic operation will show signs of the bottom phase of 6 years; at the same time, the growth of developed countries such as the United States and Europe will continue the current slowdown.The Chinese economy has to go through a long period of wandering at the bottom of the period. This is the judgment made by the author since 2012.In 2019, with the rise of China's investment, the Chinese economy will gradually leave the bottom.For the United States, the tax reduction has brought overseas capital due to the first two yearsGolden returning is nearly ending. As the US financial system function has not recovered, the process of exit and continuous interest rate hikes in US currencies has caused a certain impact on the development of the US economic development. Economic growth has begun to show insufficient trend.The impact of the political impact of law, Germany, and ideological and civilian, and the impact of economic differences between countries in the euro area and the contradiction between the unified fiscal and monetary policy, and the momentum of economic growth has not been effectively improved.
From the perspective of the international financial situation, with the pause of the US interest rate hike process, the continuous expansion of the spread between China and the United States has continued to alleviate the trend, and the depreciation of the RMB exchange rate depreciation of the interest rate -based logic of interest rates will also fade away.After the crisis in 2008, an abnormal bull market for 9 years in the US stock market was not the economy, but continued to shrink the stock MDash; —— 2003-2017, the US stock market's equity contracted with a pace of 1.5%per year.The environment has brought about the super routine decline in market interest rates, which directly led to accelerate the privatization process in the US capital market.The cumulative effect of the United States' continued interest rate hike in the early stage has significantly raised the level of bond interest rates. In addition, the slowdown of overseas return capital, the privatization process of the US stock market is close, and the probability of reversal of the stock market has increased significantly.Therefore, in 2019, the attraction of the United States to international capital will greatly decline.
From the perspective of international policy coordination, both China and the United States have the need and motivation to resolve trade disputes. They are committed to solving economic and social exchanges such as trade and investment between the two countries.On the other hand, the battle between President Telan President and Parliament, blindly the United States prioritize, regardless of forming traditional conventions and the rules of communication with the history of the country, which increases the uncertainty and international uncoordinated US policy. These political aspectsThe factors, in the context of changes in international economy and financial, inevitably exacerbate the volatility of the US dollar index.
The confirmation of the steady rise of the renminbi is a market foundation for the internationalization of RMB to effectively promote. If China can continue to advance the internationalization strategy of the RMB, China must create this market foundation.
Note: This article only represents the author's personal point of view.Editor of this article Xu Jin [email protected]
