Source: Bloomberg
The People's Bank of China promises to increase its efforts to stabilize the RMB exchange rate. Previously, as the market was concerned about the strong level of China's economic recovery, the RMB was nearly 15 years in the lowest point.
The People's Bank of China said in the evening on Friday on Friday on Friday that it will "comprehensive policy and stabilize expectations."The central bank stated in the second quarter meeting of the Monetary Policy Commission that it would "resolutely prevent the risk of exchanges in the exchange rate."
Given that domestic demand is "not strong", the central bank also promises to increase its support for the economy more widely.The latest data released on Friday morning also confirmed this evaluation.The manufacturing activities in June have shrunk again, and other industries have insufficient momentum.
After the news was released, the exchange rate of the RMB against the US dollar fell to a seven -month low, causing a decrease of more than 5%this quarter.The renminbi is less than 1%compared to the 15 years in November last year.
"The news indicates that the central bank's oral support for RMB and the economy has increased," "Alan Ruskin, chief international strategist of Deutsche Bank, mentioned the statement of the People's Bank of China," The market is expected to have major follow -up actions today. "
He believes that this may be challenging because reducing interest rates to promote growth may not help boost the exchange rate.Ruskin said that credit support and fiscal actions will help.
After the news of the People's Bank of China was released, the offshore RMB once recovered 0.2%of the loss.
The efforts of the People's Bank of China
Pantheon MacroeConomics Duncan Wrigley, chief Chinese economist, predicts that if the RMB depreciation is too fast, the People's Bank of China will be ready to intervene at any time, although they are happy to see the RMB smooth and stable depreciation.
WRIGLEY said that in its monetary policy report, the People's Bank of China hinted that it will increase its support for home buyers and will provide developers with another batch of funds to ensure that housing projects are completed.
WRIGLEY said that the People's Bank of China mentioned the use of "policy" tools to guide credit flows to specific industries, and called on guiding financial institutions to increase manufacturing medium- and long -term loans. "These are additional orientation we may see in the next month or so.Stimulating measures. "
The People's Bank of China mentioned that "it is necessary to overcome difficulties and take advantage of the trend to increase macro policy regulation", but it has not made detailed explanations.
