[Shenzhen Business Daily] This year, the two-way volatility of the RMB against the US dollar exchange rate is becoming increasingly prominent, which is also in line with the reform keynote that the RMB exchange rate formation mechanism will refer more to a basket of currencies and the two-way volatility of the RMB against the US dollar exchange rate. After the offshore RMB rose for several consecutive days and the exchange rate difference was briefly connected, the offshore RMB fell by more than 400 points in shock yesterday. At the end of the day, the onshore offshore exchange rate difference also slightly expanded to nearly 200 points.
"The stability of the RMB against a basket of currencies will be enhanced, while the two-way fluctuation of the RMB against the US dollar will increase. Again, under the reference to a basket of exchange rate mechanisms, the change of the RMB against the US dollar exchange rate will not be unilateral." Ma Jun, chief economist of the Central Bank, said recently.
Ma Jun said that the current RMB exchange rate formation mechanism will increase its reference to a basket of currencies, that is, to maintain the basic stability of the basket of currencies is the main tone of the RMB exchange rate formation mechanism in the foreseeable future.
Liu Ligang, chief economist of ANZ Greater China, also said yesterday that "the central bank may choose to promote the new exchange rate formation mechanism in a gradual and gentle way to curb the sharp depreciation of the RMB and stabilize the foreign exchange market."
As for the market trend yesterday, "the middle price rebounded, showing the intention of the regulators to continue to maintain stability in the RMB. At the same time, the devaluation of offshore RMB also shows that the regulators allow exchange rate fluctuations and do not reject depreciation expectations." Some analysts thought yesterday that the current market still needs intervention to maintain stability. (Shibeibei)