RMB Spot Exchange Rate Rose More Than 100 Points

　　 European version QE launched multinational central banks [microblog] to "protect themselves"

The European Central Bank recently announced that it will purchase 60 billion euros of bonds every month from March this year to September next year, with a total amount of more than 1 trillion euros. The intention of this move is to raise the inflation rate of the euro area in order to revitalize the regional economy. The so-called QE means that the central bank is implementing low interest rates or Zero interest rate After the policy, the increase of basic money supply through the purchase of medium - and long-term bonds such as government bonds is also briefly described as indirect printing of money.

Such a huge amount of quantitative easing policy of the European Central Bank has caused the exchange rate of the euro against the dollar to fall sharply, and some investment banks predict that the euro against the dollar may fall to the parity level in the future. Globally Economic recovery In case of recession, the European Central Bank is likely to launch a round of "exchange rate depreciation war". In fact, the week before the European Central Bank announced quantitative easing, the central banks of Switzerland, Denmark, Turkey, India, Canada, Peru and other countries have taken measures to protect themselves, competing to adopt expansionary monetary policies. Switzerland decided to decouple from the euro, Denmark, whose currency is linked to the euro, was forced to cut interest rates, and the Bank of Canada also unexpectedly announced interest rate cuts.

　　 Increased market acceptance of depreciation

The European version of QE, superimposed on the expectations of the Federal Reserve for interest rate hikes, has constantly pushed the US dollar exchange rate stronger, and has also exerted downward pressure on the RMB exchange rate. Last week, the central parity rate of the RMB against the US dollar depreciated by 154 basis points and the spot exchange rate depreciated by 222 basis points. On the 26th, the central parity rate of the RMB against the US dollar was 6.1384, the lowest since 2015. In the offshore market, the RMB showed signs of accelerated depreciation, falling to 6.2580 against the US dollar.

However, compared with the past, the market's acceptance of RMB devaluation has improved significantly. In fact, since 2014, the two-way fluctuation of RMB exchange rate has become more and more significant. The industry generally believes that short-term appreciation and depreciation are normal fluctuations, which are not only affected by economic or market fundamentals, but also the inevitable result of a more market-oriented RMB exchange rate formation mechanism.

　　 In the long run, there is no significant difference depreciation Basics

In the long run, there is no basis for a substantial depreciation of the RMB. Fu Bintao, Strategic Planning Department of Agricultural Bank of China Head Office, pointed out that, considering the strong ability of the People's Bank of China to control the exchange rate, the depreciation space of RMB against the US dollar is limited. Liu Dongliang, a senior analyst in the financial market department of China Merchants Bank Head Office, [microblog] also said earlier that under the background of the differentiation of monetary policies between China and the United States, there is indeed depreciation pressure, but it is more likely to enter two-way fluctuations rather than significant depreciation.

He also pointed out that the European Central Bank QE will increase global liquidity. In addition to the flow of international arbitrage capital to the United States, China, with relatively high interest rates and economic growth, will become the second largest destination after the United States. This will, to some extent, ease the pressure of capital outflows faced by China due to the strengthening of the US dollar.