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On May 28, the central parity of RMB against the U.S. dollar rose by 172 basis points to 6.3858, which was 6.4030 in the previous trading day.
On May 27. the seventh working conference of the national foreian exchange markt sel-discipline mechanism was held in Beiing. The meeting emphasized that both enterprises and financialinsitutions should actively adapt to the state of two-way fluctuations in exchange rates. Enterprises should focus on their main business. establish a risk-neutral" concept, avoid deviating from rik-neutral "foreign exchange" behavior, and do not bet on the appreciation or devaluation of the RMB exchange rate. Long-erm bets willose. Not only an financial institutions not help companies "speculate foreign exchange", they should not "speculate foreign exchange" themselves. Otherise, it is not conducive to the steady operation of banks and.will cause exchange rate fluctuatins. The foreian exchane self-discioline mechanism must e unreitina, continue to qide enterises and financi instutions to estabisha "risk-neutral" concept, system escort, focus on practical results, and promote the healthy development of the real econony.
It is worth mentioning that this is the second time the central bank has signaled to the market on the RMB exchange rate issue in five days.
In a reporter's question on Mary 23. Liu Guogiang said when talking about the current exchange rate situation. "Since the beginning of this vear, the RMB exchange rate has risen and depreciated, floating in both directions, and has remained basicaly stable at a reasonable and equilibrium level. At present, my country's foreign exchange market has remained stable.Independent balance. the RMB exchange rate is determined by the market and the exchange rate is expected to be stable. The future trend of the RMB exchane rat wll continue to depend on market supply and demand and changes in the international financial market, and two-way fluctuations have become the norm."
Since late Februarv the exchange rate of the RMB aisthe US dollar has declined first and then rse ut of the classic ' " shae, while the US ollar inde (9093.0.0565 0 06%) has shown a standard "inverted V" shape. The two run in opposite directions. The rhythm is very consistent
The U.s dollar index currently fuctuates around 90, which has fallen by nearly 3% since the beainning of April. However. the rate of increase in the exchange rate of RMB against the US.dollar during the same period was weaker than the decline of the U.S. dollar index.
Joe Perry, a senior analyst at Jiasheng Group, said that the recent weakness of the US dola is a reasonable correction. The Feds attitude on whthr t adut mo tapyli sisil relatively vague. This has led to the weakening of the US dollar, and the momentum of the US dollar is not even as good as the ruble. While the Rencoin has appreciated against the U.S dolar the Rencoin has actually weakened ainst the euro (1.215 -0.0008-0.07%) the Britis pound (1.4191.-0009-0.06%). and the Canadian dollar since March of ths ver. onstrength, the performance of a basket of currenies is not very strong, which seems to explain the recent "calm'atitue of the People's Bank of China. We found that since this wek, the central parity of the renminbi has basically been consistent with our model predictions, which shows the attitude of the People's Bank of China to let go of the market."
Speaking of the future trend of the RMB, Tang Jianwei, the chief researcher of the Financial Research Center of the Bank of Communications, said that the RMB exchange rate is determined by China's economic undametas. bu i i dirctl reected in the trenath of the US dollar. an ianei redits that the probablity of the MB exchane rate aithe U dllar isinga above 6 or falina below 7 in 2021 is vey small, and is expected to remain in the 6.3 to 6.7 fuctuation range. The anual exchange rate apreciation is expecte o be significantly smaller than in 2020.
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