Abstract On the evening of last Friday, the China Foreign Exchange Trading Center officially released the CFETS RMB exchange rate index. The central bank's official website also published a special commentator article of the China Money Network, "Observing the RMB exchange rate depends on a basket of currencies." The industry believes that this move will change the city for a long time...
On Friday night, the China Foreign Exchange Trading Center officially released the CFETS RMB exchange rate index. The central bank's official website also published a special commentator article of the China Money Network, "Observing the RMB exchange rate depends on a basket of currencies." The industry believes that this move will change the long-term view of the market to observe the RMB exchange rate "close to the dollar", become an important indicator of the market's tendency to observe exchange rate policy, and the marketization process of the RMB exchange rate will also be greatly advanced. The RMB exchange rate must be targeted at a basket of currencies
On the evening of December 11, the foreign exchange trading center officially released the CFETS RMB exchange rate index. According to the calculation of the foreign exchange trading center, the CFETS RMB exchange rate index on November 30, 2015 was 102.93, an increase of 2.93% from the end of 2014.
“Since 2015, the overall trend of the CFETS RMB exchange rate index has been relatively stable.†The commentator’s article published by the central bank pointed out that this shows that despite the depreciation of the RMB against the US dollar since 2015, the RMB is against a basket of currencies from a more comprehensive perspective. Still slightly appreciated, the RMB is still a strong currency in major international currencies.
This is the first time that the foreign exchange trading center has issued the RMB exchange rate index, which is of great significance to promote the social perspective of the RMB exchange rate perspective.
It is reported that the CFETS RMB exchange rate index refers to the CFETS currency basket, specifically including the RMB exchange currency of the China Foreign Exchange Trading System, and the sample currency weight is calculated by the trade weight method considering the re-export trade factor. The sample currency price is the central parity of the RMB foreign exchange rate and the trading reference price of the day.
For a long time, when the market observes the level of the RMB exchange rate, it mainly focuses on the bilateral exchange rate against the US dollar. According to the commentator's article, since the exchange rate fluctuation is intended to regulate the trade and investment of multiple trading partners, only observing the bilateral exchange rate of the RMB against the US dollar does not fully reflect the international price of traded goods.
"That is to say, the RMB exchange rate should not be referenced only to the US dollar, but also to a basket of currencies." The article pointed out that the exchange rate index, as a weighted average exchange rate, is mainly used to comprehensively calculate the weighted average of a country's currency against a basket of foreign currencies. Changes in exchange rates can more fully reflect changes in the value of a country's currency.
Lu Zhengwei, chief economist of Industrial Bank, commented that this is a declaration of “decoupling†from the US dollar, meaning that the US dollar will be more flexible in the future and the RMB exchange rate will be more market-oriented. At the same time, it means that the effective exchange rate will be more concerned in the future, and the effective exchange rate will have a greater impact on the economy.
Maintain a basic level of stability at a reasonable level
Recently, the RMB exchange rate has fluctuated greatly. The trend after joining the SDR has attracted people's attention. At this point, market participants are more concerned about the impact of the RMB exchange rate index on the future trend of the RMB exchange rate.
"The China Foreign Exchange Trading Center regularly publishes the CFETS RMB exchange rate index, which will help guide the market to change the past habit of focusing on the bilateral exchange rate of the RMB against the US dollar. Gradually, the effective exchange rate calculated with reference to a basket of currencies is used as the main reference system for the RMB exchange rate. It is conducive to maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level," the commentator article said.
As a new quantitative indicator of the market's RMB exchange rate, in the view of some market participants, the index is a kind of real effective exchange rate of the RMB. Its launch is an important window for the market to observe the tendency of China's exchange rate policy, marking the marketization process of the RMB exchange rate. Will advance significantly.
Liu Dongliang, a senior analyst at China Merchants Bank's interbank financial headquarters, said that from the perspective of enterprises, the volatility of the RMB exchange rate against the US dollar will rise sharply in the future, and corporate exchange rate risks will be accelerated. The annual volatility of the renminbi has reached a level comparable to that of other mainstream currencies. Of course, this will be a gradual process.
"Exchange rate marketization will force enterprises to pay attention to exchange rate hedging and stimulate the vitality of the derivative trading market." Liu Dongliang said that at present, large domestic central enterprises and state-owned enterprises have too low risk appetite in dealing with exchange rate issues, and it is difficult to adapt to future exchange rate risks. The marketization of exchange rate will force it to force the large enterprises to increase their risk appetite for exchange rate derivatives. The increase of market volatility and the increase of risk will be beneficial to the innovation of exchange rate derivatives market. Variety is likely to accelerate the launch.
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