original title:RenminbiProspects for next week: short-term maintenance of the range-bound mode. Ministry of Commerce of China: Absorbing 481 billion yuan of foreign capital from January to May 2021, a year-on-year increase of 35.4%
FX168 Financial News Agency (Hong Kong) reported that the renminbi against the U.S. dollar closed slightly down on Friday, while the central parity rose to a new high in more than one week, maintaining a range-bound mode in the short-term. In terms of global currency markets,Dollar indexIt fell slightly last Friday, and the major currency pairs stayed within the recent range. The market was dissatisfied with the US high inflation data on Thursday, following the Fed’s view that this may be temporary inflation. The Ministry of Commerce of China pointed out on its website on the 12th that from January to May 2021, it will absorb 481 billion yuan of foreign capital, a year-on-year increase of 35.4%.
According to the Ministry of Commerce of China, from January to May of 2021, 18,497 newly established foreign-invested enterprises nationwide, an increase of 48.6% year-on-year, an increase of 12.4% year-on-year; the actual use of foreign capital was RMB 481 billion, an increase of 35.4% year-on-year, compared with 2019 A year-on-year increase of 30.3%.
From an industry perspective, the actual use of foreign capital in the service industry was 381.9 billion yuan, a year-on-year increase of 41.6%. The actual use of foreign capital in high-tech industries increased by 34.6%, of which high-tech service industries increased by 37.6%, and high-tech manufacturing industries increased by 25%. In terms of source, actual investment in countries along the “Belt and Road”, ASEAN, and EU increased by 54.1%, 56%, and 16.8% respectively year-on-year (including investment data through free ports). In terms of regional distribution, the actual use of foreign capital in eastern, central, and western China increased by 37%, 36%, and 10.4%, respectively.
The People’s Bank of China authorized the China Foreign Exchange Trade System to announce that on June 11, 2021, the central parity of the RMB exchange rate in the inter-bank foreign exchange market will be: 1 U.S. dollar to RMB 6.3856, 1EURFor RMB 7.7729, 100 Japanese Yen against RMB 5.8370, 1Hong Kong dollarTo RMB 0.82291, 1GBPTo RMB 9.0488, 1 Australian dollar to RMB 4.9489, 1New Zealand DollarFor RMB 4.5911, 1Singapore DollarFor RMB 4.8240, 1 Swiss franc to RMB 7.1367, 1 Canadian dollar to RMB 5.2797, and RMB 1 to 0.64506 MalaysiaRinggit, RMB 1 yuan to 11.2327 Russiaruble, RMB 1 yuan to 2.1293 South AfricaRand, RMB 1 yuan to 174.22won, RMB 1 yuan to 0.57528 UAEDirham, RMB 1 yuan to 0.58747Saudi Riyal, RMB 1 yuan to 44.4371 HungaryForint, RMB 1 yuan to 0.57477PolandZloty, RMB 1 yuan to 0.9566Danish Krone, RMB 1 yuan to 1.2921Swedish Krona, RMB 1 yuan to 1.2954Norwegian Krone, RMB 1 yuan to 1.31989Turkish Lira, RMB 1 to 3.0850Mexican Peso, RMB 1 yuan to 4.8750 baht.
Zhang Zhiwei, chief economist of Insurance Bank Capital Management, pointed out that US inflation has risen further, but the market believes that the US government is determined to tolerate rising inflation. The current market sentiment is high, which is positive for the RMB exchange rate in the short term, but it must also be noted that the policies implemented by the Federal Reserve may bring medium- and long-term risks to the United States in terms of inflation and financial stability.
The Economic Daily under the United Daily News quoted CICC as saying that the Fed may underestimate the risk of inflation. The monthly growth rate of CPI has been higher than expected for two consecutive months, which is beyond the scope of the base effect. The market’s response to the inflation data is flat. On the one hand, it may be that the market chooses to trust the Fed, and on the other hand, the flood of liquidity may paralyze the nerves of the market.
At present, the market is flooded with US dollar liquidity, and financial institutions have flocked to the Fed’s reverse repurchase operation tool. The latest data shows that the Fed absorbed US$534.9 billion in cash on Thursday, a record high for the fourth consecutive day.
Looking back on this week’s important speech, CCTV News pointed out that the Lujiazui Forum held a discussion this morning on the topic of the new role of the RMB under the “dual cycle” pattern and the allocation of global resources. Huo Yingli, Secretary of the Party Committee of the China Foreign Exchange Trading Center, said Under the “dual cycle” pattern, with the opening of the financial market, in terms of the activity of the renminbi, there are characteristics such as active transactions by foreign investors and increased linkages between domestic and foreign currencies.
Huo Yingli pointed out that from the perspective of transactions, the transaction volume of foreign exchange derivatives by foreign institutions basically achieved a growth of 100% last year, and the growth trend is obvious. The functions of the foreign exchange market are expanding in the direction of the opening of the financial market and the direction of financial market transactions.
Hu Xiaolian, member of the Standing Committee of the Chinese People’s Political Consultative Conference and Chairman of the Export-Import Bank of China, attended the opening ceremony of the forum and delivered a speech on the theme of “the new role of the renminbi and global resource allocation under the “double cycle” pattern. The severe impact brought by the economy, major global economies have introduced large-scale fiscal stimulus policies and extremely loose monetary policies, fiscal deficits have increased sharply, and central bank balance sheets have expanded rapidly. The US federal fiscal deficit in the first seven months of fiscal 2021 reached US$1.9 trillion, the highest level in history during the same period.
The Fed’s assets reached US$7.36 trillion at the end of 2020, an increase of 76% from 2019. The European Central Bank and the Bank of Japan continued to substantially expand their balance sheets. The liquidity of major international currencies continues to rise, and global commodity prices continue to rise. Inflation, which has not entered the field of vision for many years, has once again become a hot topic. The containment and suppression of my country’s development by some western countries has been escalating, and anti-globalization has returned. The international economic landscape is undergoing in-depth adjustments. my country has entered a new stage of development, starting the “14th Five-Year Plan” construction journey, and implementing new development concepts and building a new development pattern have become the main theme of development.
And she believes that the development prospects of the internationalization of the RMB should be focused on and highlight several points. The first focus is on the domestic consumer market, the second focus is on the domestic capital market, and the third focus is on green finance. For the market, the fourth focus is on the stage of development of RMB internationalization.
Pan Gongsheng, deputy governor of the People’s Bank of China and director of the foreign exchange bureau, said at the forum that the RMB exchange rate fluctuates in both directions and the foreign exchange market operates smoothly. He also said that two-way fluctuations will become the norm. He also mentioned that market entities should adapt to the normal two-way exchange rate fluctuations and establish the concept of exchange rate risk neutrality. In addition, the reform of foreign exchange management will be steadily promoted to enhance the convenience of cross-border trade liberalization.
He said that changes in the international financial market, especially the fluctuations in US dollar interest rates and exchange rates, have had a certain impact on other currencies, including the renminbi. At the same time, the Chinese economy has maintained a stable recovery trend, which has promoted the basic stability of the RMB exchange rate at a reasonable and equilibrium level. At present, China’s current account surplus continues to be within a reasonable range, the foreign exchange market is basically balanced with supply and demand, and foreign exchange reserves are rising steadily. The managed floating exchange rate system implemented by China based on market supply and demand, adjusted with reference to a basket of currencies, is an exchange rate system arrangement suitable for China’s national conditions and requires long-term adherence.
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