Speculation On RMB Exchange Rate Reform In 2014

How far is the RMB P exchange rate from free floating, whether the RMB exchange rate will continue to rise, how much the RMB's daily volatility will expand to and so on remains to be solved by the market.

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< p > < strong > < a > href= > //www.sjfzxm.com/ > Central Bank > /a > intervention less than /strong > /p >.

Under the background of the central government's determination to speed up the exchange rate reform, with the stabilization of China's economy, the RMB appreciated by 3% against the US dollar in 2013, and the central parity of the whole year increased 41 times, becoming one of the strongest international currencies of last year. P

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< p > a lot of export enterprises have complained in an interview with reporters: "we were not profitable at all. The central bank seems to be interested in guiding the renminbi to go higher. Why must we challenge the limits that enterprises can afford?" < /p >

In the opinion of financial experts, these traders misunderstood the intentions of the central bank. P

"The reason why we can see that the recent strong performance of the renminbi is not precisely guided by the central bank, but precisely because the central bank has reduced the intervention in the foreign exchange market," said Wen bin, director of macroeconomic research at the International Finance Institute of Bank of China (601988, stock bar). "This is a positive change in the recent foreign exchange market."

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< p > with Yi Gang's original words, "continue to move towards the market orientation. In most of last year, the central bank basically did not enter the market."

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< p > by comparing the prices of the RMB in the offshore and offshore markets, it is easy to see that the two are converging.

At the time of press release, the spot price of RMB against the US dollar (CNY) was 6.0506, FOB (CNH) was 6.0518, and the spread was negative.

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"Generally speaking, CNH can better represent the supply and demand of the market," an analyst at the P exchange risk control center told reporters.

Since the recent CNY is very close to CNH, it shows that the onshore market is entirely market-oriented.

And the current price is very close to the short-term equilibrium level of the market, indicating that there is little room for appreciation in the short term.

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This year, the chief economist of Bank of Communications (601328, stock bar), Lian Ping, predicts that the RMB will maintain a moderate trend of appreciation. The probability of "breaking 6" will be great, but the increase will not be as good as 2013.

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< p > when it comes to the hot topic of RMB exchange rate, the people's Bank of China Survey and Statistics Division Sheng sung Cheng told reporters: "a moderate appreciation of RMB will help to change the way of over reliance on exports, which will promote enterprises to increase production efficiency, speed up technological progress, increase added value of products and enhance international competitiveness. The return of RMB to a balanced level is conducive to improving the quality and efficiency of economic development."

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< p > the central bank frequently releases the signal of "gradually withdraw from market intervention", which is regarded as the premise of other major reform measures.

Liu Dongliang, a senior analyst at China Merchants Bank, judged that if there were no accidents during the withdrawal period, the central bank might relax its volatility next step.

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< p > as mentioned in Yi Gang's article, improving the mechanism of RMB exchange rate marketization needs to increase the elasticity of RMB exchange rate, so that the RMB exchange rate can float in two directions, forming a fully flexible, two-way floating exchange rate formation mechanism determined by market supply and demand.

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< p > Zhu Haibin, chief economist of J.P. Morgan, expects that the daily trading volatility of the RMB against the US dollar will be extended from 1% to 2% in the near future.

Economists from Citibank believe that when the market stabilizes the RMB exchange rate, it will be the best time to relax the volatility of the RMB. At that time, the central bank is likely to expand the volatility from the current 1% to 2%.

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< p > domestic experts' judgments are more positive and optimistic.

"The central bank's reform is always step-by-step, and it is likely to be extended to 2% after the first half of this year to observe the period for a period of time, and then further expand to 3% in the second half of this year," Wen Bin told reporters. "This is also consistent with what Yi Gang said," the RMB exchange rate is not far from floating freely, because 3% of the volatility is enough. "

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< p > in addition to easing the volatility and weakening the policy signal significance of the intermediate price, it will be a key step in the reform.

Liu Dongliang expects that the pricing power of the central parity of RMB will be pferred to the market to a greater extent this year.

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< p > < strong > regulatory means updated < /strong > /p >

< p > Yi Gang's statement about Tobin tax has aroused wide attention in the article.

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< p > Tobin tax is a paction tax on foreign exchange pactions designed to reduce speculative trading.

As a means of indirectly regulating the economy, the management cost of Tobin tax is relatively low, which can effectively stabilize the exchange rate volatility of the financial market.

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Chen Chao, member of the forty Member Forum of "P > China a href=" //www.sjfzxm.com/ "> Finance < /a >, suggested that China should introduce the Tobin tax system without interest reserve.

Its advantages are embodied in three aspects: first, the interest free reserve is conducive to improving the capital inflow term structure, reducing the short-term investment capital inflow and guiding the long-term capital inflow; secondly, the interest free reserve system has expanded the cost of interest spread for the arbitrage of investment capital, reduced the speculative capital inflow intention and reduced the appreciation pressure of the local currency; thirdly, the capital pool constructed by the interest free reserve system has effectively blocked the external liquidity overflow, making China's monetary policy relatively independent.

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"P >" our capital account liberalization is the general trend, but at the same time, it will bring international capital flows.

Under the background of financial crisis in the post crisis era, the risks can not be ignored.

Wen Bin said, "therefore, before opening up, it is necessary to study and introduce emergency measures such as Tobin tax."

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In terms of regulatory means, Yi Gang also pointed out in the article that we should speed up the establishment of monitoring and early warning platform and index system for cross-border capital flows, enrich policy plans based on counter cyclical adjustment, strengthen supervision and coordination with relevant departments, and strive to form a regulatory force to prevent cross-border capital flows and shocks. P

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