[Epoch Times on August 21, 2021](Epoch Times reporter Liu Yi comprehensive report) On August 20, the onshore exchange rate of RMB against the US dollar fell to 6.5000 RMB to 1 US dollar, a decrease of 71 basis points from the previous trading day. It hit a new low for more than three weeks; on the previous trading day, the FOB price of RMB also fell below 6.50. Some traders said that the market looks at devaluing the renminbi.
Based on news from the mainland and overseas media, on the 20th, the onshore price of RMB against the US dollar opened at 6.4950, fell below the 6.50 mark in early trading, dropped to 6.5059 at the lowest intraday, and closed at 16:30 at 6.5000, down 71% from the previous trading day. Point.
This is after the offshore renminbi fell below 6.50 on the previous trading day, the onshore renminbi also fell below this threshold. The offshore renminbi/dollar exchange rate approached the 6.51 mark in intraday trading on August 20, with the lowest depreciation to 6.5096.
So far, the offshore RMB exchange rate against the US dollar has erased all the gains this year. At the end of 2020, the offshore RMB exchange rate against the US dollar closed at 6.5030.
Reuters quoted the analysis of traders as saying that the Fed’s reduction of expectations continued to ferment, coupled with the accelerated spread of the Delta virus, the US dollar index rose to a high of nine and a half months, and the renminbi was under pressure to adjust. Moreover, on the 20th, the Chinese Communist Party’s official renminbi central parity fell sharply and approached the 6.5 mark, a four-month low, which also provided confidence in the immediate depreciation, but it remains to be seen.
A trader at a Chinese bank believes that the US dollar against the renminbi has traded sideways between RMB 6.45 and RMB 6.50 for more than a month, and the 20th cannot be regarded as an effective breakthrough of RMB 6.5, and further observation is needed.
However, a foreign bank trader expressed a different view. The trader said: “I am optimistic about the long-term RMB depreciation, because there are basically no favorable factors for the RMB.”
The Paper quoted Western Securities as saying that the US dollar index may continue to rebound in the third quarter. After the epidemic, the US fiscal stimulus phase has come to an end. The US trade deficit is expected to converge, employment data has improved significantly, and austerity is on the line. As China’s export growth rate will slow further, the RMB exchange rate at the end of the third quarter is likely to be weaker than at the end of March. It is expected that the probability that the central parity rate of RMB will temporarily rise above 6.6 at the end of the third quarter is not low.
The Caixian Press said that some people in the mainland market believe that the rebound in the US dollar index and Sino-US relations are major uncertainties. At the same time, as the mainland economy is facing downward pressure, the RMB exchange rate will increase its flexibility, and the central bank’s emphasis on “self-centeredness,” the RMB exchange rate will also face downward adjustment pressure.
Editor in charge: Li Qiong
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