Central Bank'S "Light And Dark Combination" Strengthens The Differentiation Of Exchange Rate Expectations

During the two sessions, the central bank executives held a "no stop" attitude towards all kinds of speculation about the early stage of the RMB collapse. They repeatedly stressed that the late exchange rate would be "two-way volatility" and more concerned about the medium-term trend than the short-term trend. P

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< p > analysts combined with the market view that after the sharp fall in exchange rate alerts the exchange rate risk, the central bank made effective management of market expectations from two aspects.

On the one hand, the central bank has indicated its attitude, indicating that the trend of exchange rate should be more dependent on the balance of payments, and it will clearly tolerate short-term exchange rate fluctuations.

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< p > "from the perspective of the people's Bank of China, it is more concerned about the trend of the medium term, and the short-term trend does not necessarily represent the medium term trend."

At the press conference held at the two sessions, Zhou Xiaochuan pointed out that he agreed to carry out exchange rate analysis based on quarterly balance of payments. However, based on the monthly trade data of goods, it is also very normal to make differentiation and analysis.

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< p > but at the same time, Zhou Xiaochuan did not explicitly exclude the possibility of intervention by the central bank.

"Most of the analyses are reasonable and there are quite a few parts of the analysis that I agree with. From the perspective of the central bank, we do not have to stand on the side, such as which side to support or which side to support."

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< p > combined with the previous a href= "//www.sjfzxm.com/news/index_c.asp" > RMB > /a > a drop of more than 500 points a day, this may imply that when the market is expected to be stronger and divorced from the actual trend of the balance of payments, the intervention of the central bank's hard market intervention may still happen.

This determination will create a lasting deterrent for short-term arbitrage funds.

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< p > "if the exchange rate reflects the actual demand, then how to go and how to go."

A foreign bank trader commented that the central bank has shown its determination and ability to strike a short bear, and other things can be handed over to the market.

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< p > he thinks that although arbitrage can not disappear, "even if speculators are alert and unguarded, the effect will be different."

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Such a p exchange rate situation will help alleviate the pressure brought about by unilateral appreciation in recent years, reduce pressure on the export industry and protect employment, ease international capital inflow to provide space for domestic monetary policy, and provide a relatively stable policy window for coordinating and pushing forward the market-oriented reform of exchange rate interest rates.

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Since P entered into March, with the less optimistic a href= "//www.sjfzxm.com/news/index_c.asp" > economic data < /a > released in the past month, the market for suspected intervention has been less and less, and the fluctuation of the intermediate price has increased.

The enhancement of this price signal has replaced the previous suspected quantitative intervention in guiding the market.

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Yu Yongding, a member of the Academy of Social Sciences, said in an interview with Reuters during the two sessions, "the key to the floating exchange rate system is to reduce the frequent intervention by the central bank in the foreign exchange market." P

The expansion of the exchange rate day is a result.

If the central bank does not interfere with the situation, the volatility is not large, which is also very good.

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In the later period of "P", if "a href=", "//www.sjfzxm.com/news/index_c.asp", "//www.sjfzxm.com/news/index_c.asp", "/a >" inflow, expected continuous differentiation, and the market in a certain price range, the necessity of the central bank to intervene again is greatly reduced.

This will reduce the passive growth of foreign exchange, thereby giving the central bank greater impetus to regulate liquidity through open market operations and even use other monetary policy instruments.

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P, who had previously participated in internal policy discussions, told Reuters that if the economic growth rate dropped to 7.5% and slid to 7%, the central bank would lower the deposit reserve ratio of banks, and the central bank would continue to implement existing monetary market operations and exchange market intervention through state-owned banks.

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Shi Lei, a research director of Ping An Securities fixed income department, said in a Reuters column that the need to be cautious now is the market volatility caused by the linkage resonance between the RMB exchange rate and liquidity. P

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< p > he said that if the fluctuation of the RMB exchange rate or related policy adjustments trigger a reversal of the concentration of passengers, or when the external market is in a precarious situation, the impact on the stock market, bond market and commodity market will be enormous.

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< p > "although the first active fluctuation in February has not caused the guest to escape, it is almost certain that the fluctuation of the RMB exchange rate market is not a quick move."

He said.

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