Home » The foreign exchange market is generally stable and the two-way volatility of the RMB exchange rate has increased

The foreign exchange market is generally stable and the two-way volatility of the RMB exchange rate has increased

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Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, stated at a press conference of the State Council Information Office on the 23rd that the foreign exchange market has generally been operating steadily since the beginning of this year, market sentiment has been basically stable, exchange rate expectations are reasonably differentiated, foreign exchange transactions are rational and orderly, and the foreign exchange market is orderly. keep great. The two-way volatility of the RMB exchange rate increased and remained basically stable at a reasonable and balanced level.

  Increased exchange rate marketization

Wang Chunying introduced that the two-way fluctuation of the RMB exchange rate was very obvious from the perspective of the situation in the first half of the year. Two-way volatility reflects the complexity and unpredictability of changes in the international market. This year, the epidemic is still spreading around the world, the world economy is recovering unbalancedly, and neither inflation nor employment trends in major developed economies are clear, increasing the uncertainty in the international financial market.The main situation of the international market has changed repeatedly.currencyThe exchange rate has an impact, and the increased two-way volatility of the RMB reflects the complexity and unpredictability of changes in the international market.

At the same time, the two-way fluctuation of the exchange rate reflects the increase in the degree of marketization of my country’s exchange rate. Wang Chunying pointed out that in the first half of this year, the historical volatility of the RMB against the US dollar exchange rate was 3.1%, which has gradually approached the volatility of currencies in developed economies such as the euro, pound sterling, and yen, with increased flexibility. Under the market-based adjustment mechanism, the two-way volatile RMB exchange rate is timely and adequate, and accurately reflects changes in the international market and changes in domestic foreign exchange supply and demand.

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  RMB currency value remains stable

Wang Chunying said that in recent years, the renminbi exchange rate has become more flexible and volatility has increased, but the overall volatility is lower than that of currencies in emerging economies, and it is even different from the fact that some currencies often fluctuate sharply.

The renminbi has shown relatively good currency stability, reflecting the long-term positive development trend of China’s economy. China’s economy has recovered steadily, its economic structure has continued to be optimized, and its economic vitality has increased significantly. The advantages of economic fundamentals have played a very important role in stabilizing the RMB exchange rate and enhancing market confidence. The RMB exchange rate remains basically stable within a reasonable range, which reflects the characteristics of this aspect.

The stability of the renminbi currency also reflects China’s basically balanced balance of payments pattern. In recent years, the international balance of payments has maintained a basic balance and has continued to consolidate. In the first half of this year, the current account was in a reasonable range, and cross-border capital flows were both in and out, maintaining a balance. therefore,foreign exchange reservesBasically stable.

Wang Chunying pointed out that the long-term stability of China’s economy is improving, and the supporting factors that make the foreign exchange market and RMB exchange rate show the above characteristics and trends still exist. In addition, the continuous progress of reform and opening up and the continued steady development of the international balance of payments operation has provided good support for the stable development of the foreign exchange market. However, the exchange rate will be affected by many factors at home and abroad, and some international uncertainties and unstable factors still exist. Therefore, the two-way fluctuation of the RMB exchange rate will continue, but it will remain basically stable within a reasonable range.

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(Source: China Securities Journal)

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