Original Title: The Central Bank’s Foreign Exchange Bureau has successively launched moves to stabilize the exchange rate and promote two-way opening. Source: Economic Information News
The State Administration of Foreign Exchange’s updated QDII investment quota approval status table shows that the newly issued QDII quota of US$ 10.3 billion to 17 institutions covers all major types of financial institutions such as funds, securities, banks, and insurance. The actual needs of cross-border investment by the applicants. This is the largest amount of QDII issued in a single or a single month in history. After this round of issuance, the foreign exchange administration has approved a total of 147.319 billion U.S. dollars in investment quotas for 173 QDII institutions.
The relevant person in charge of the State Administration of Foreign Exchange stated that since the beginning of this year, cross-border funds under QDII have flowed out in an orderly manner, and various institutions, especially fund companies, have launched public offerings one after another, which better meets the growing demand for foreign investment from domestic residents. On this basis, the State Administration of Foreign Exchange has increased the scale of QDII quota issuance in this round.
Guan Tao, global chief economist of Bank of China Securities, said on the 3rd that accelerating the issuance of QDII quotas will help build a new pattern of two-way financial opening, and it will also help ease the diversified overseas asset allocation needs of domestic entities, and provide domestic financial institutions to improve their overseas investment capabilities. opportunity.
It is worth noting that on May 31, the People’s Bank of China decided to increase the foreign exchange deposit reserve ratio of financial institutions by 2 percentage points from June 15, 2021, which means that the foreign exchange deposit reserve ratio will be increased from the current 5% to 7%. . This move has released a more obvious policy signal that the monetary authorities do not want the RMB exchange rate to continue to rise unilaterally.
In response to these recent measures, Guan Tao said that this reflects the relevant departments’ goal of maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level, as well as adopting a combination of foreign exchange policies that increase exchange rate flexibility and orderly expand the two-way opening of the financial market. It is expected that the central bank’s foreign exchange bureau will still have a series of new measures to implement balanced management of cross-border capital flows around the high-level opening of capital accounts and financial markets, especially the opening of stocks, bonds, and foreign exchange markets. “The market does not have to worry about the exchange rate, let alone bet on the unilateral appreciation or devaluation of the renminbi.” He said.
The relevant person in charge of the foreign exchange bureau said that in the post-epidemic era, the global political economy is still facing greater uncertainty, and international financial market volatility may also increase further, objectively putting forward higher requirements for domestic investors’ overseas financial investment management capabilities and risk management. . Therefore, it is recommended that QDII institutions conduct overseas investment business in an orderly manner, make prudent business decisions, promote a diversified layout of products and investments, continuously optimize the allocation of overseas assets, and effectively control overseas investment risks. (Reporter Zhang Mo)
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