The official yuan has not been seen with the public for nine days.
When Chinese people were immersed in the golden week, the global financial market was in a turbulent: pound slumped, Deutsche Bank crisis continued, non-agricultural data influenced on expectations of further fed rate rises. China's foreign exchange reserves have been decreasing for three consecutive months, and many cities has proclaimed real estate regulations.
The offshore RMB market, which does not have holidays, is surging. The offshore renminbi, after falling below 6.7 on June 6, fell to 6.7182 on the morning of July 7, hitting its lowest level of the year and widening the spread of onshore RMB to more than 400 before the market-open.
The incident should have an impact on the middle price of CNY/USD parity announced on October 10, which will draw considerable attention.
It is expected that the central parity rate of the RMB will be over 6.69 next Monday (10th), close to 6.7. Xiao Lisheng, deputy director of the international financial research office of the Chinese Academy of Social Sciences.
He pointed out that pricing mechanism of RMB is closing rate + a basket of currencies exchange rate changes. Pound slumped against the dollar in a short time by more than 10% on 7th morning, and the dollar index continued to rise, both will cause the yuan’s central price to go down.
“The dollar index generally rose during the National Day holiday, once broke through 97 and now is stabilized above 96, which increased the pressure on the depreciation of RMB.” Mr Xiao believes that whether the fed rise its rate rise will affect the appreciation of RMB.
Despite the latest data showing that the U.S. economy added 156,000 jobs in September, which was less than expected, top fed officials were not pessimistic about the U.S. economy.
Richard Fisher, vice chairman of Fed, said the data was very close to the ideal level, indicating that the U.S. economy was moving forward, but not growing too fast to pose risks. Chairman of Cleveland Fed said the job market was healthy and revenue was growing, and there would be possibilities in all meetings ahead.
Xiao Lisheng pointed out that although there is a view that the latest non-agricultural data would cut interest rates in U.S., but according to fed officials, judgement on whether to raise interest rates is consistent, the fed still stands large chance to raise interest rates in December of this year, and as a result, the yuan's depreciation pressure will continue till the end of this year.
As for China's foreign exchange reserves falling for three months, falling $18.785 billion in September, XiaoLiSheng, said the data on the one hand, reflects the Chinese government is to capital outflows, on the other hand shows that the central bank's use of the storage stability of RMB exchange rate.
China's central bank governor Zhou Xiaochuan said that recently, China’s capital outflow pressure has eased; given China's economic operation is in a reasonable range, and the current account surplus persists, China's cross-border capital flows will become more balanced.
Song Qinghui economist points out that, in consideration of events which gave rise to depreciation of RMB during the National Day vacation, RMB middle price will jump downward by outside shocks on 10th, onshore renminbi will depreciate a little as well, but the specific direction of the yuan still depends on the central bank.
Tian Lihui, professor of Institute of Financial Development at Nankai university, said that RMB’s future mainly depends on the capability of People's Bank of China. The current economic situation and China's foreign exchange reserves are enough to stabilize RMB, and to allow for wide fluctuations. People need not be excessive pessimistic of RMB.
In addition, 20 cities including Beijing, Shenzhen, Hangzhou and Chengdu, have released new policies on the housing market in the hope of cooling the property market.
Li Peiyu, senior researcher of the institute of international finance at Bank of China, said that, we can see the influence on the recent offshore RMB from the new real estate regulations, part of the investment has been drawn from the property market to global asset allocations, thus weakened RMB and increase capital outflow pressure.
Link：http://www.chinanews.com/cj/2016/10-09/8025207.shtml
