Guo Shuqing: It is impossible for the Renminbi to continue to depreciate
The central parity of the yuan was reported at 6.8472 on Friday, a sharp increase of 333 points from the previous day. However, as the US dollar index stabilized, the yuan rose first. Over the week, onshore Renminbi (CNY) rose more than 0.7%, the biggest weekly increase in four months. Guo Shuqing, chairman of the China Insurance Regulatory Commission, wrote in the People’s Daily that the short-term fluctuation of the RMB exchange rate is normal. The long-term view of China’s economic fundamentals, the renminbi is unlikely to continue to depreciate, and the market exchange rate will continue to approach purchasing power parity.
CNY has seen 6.8314
Guo Shuqing said in the article that the United States can impose tariffs on the limits, but the impact on the Chinese economy will be very limited. In contrast, the United States will be hit by almost the same intensity. The US tariff increase target is to reduce the US-China trade deficit. However, due to China’s counter-measure, the direct result of the tariff increase is very uncertain, and it is likely that the effect will be minimal or even counterproductive. He mentioned that China will insist on promoting the opening up of the financial industry. However, while expanding financial openness, we must also be alert to the big-in and big-out of cross-border funds and hot money speculation, and resolutely avoid the real estate and financial asset bubbles.
Guo Shuqing reiterated that the renminbi could not continue to depreciate. CNY had risen above 6.84 in the early part of Friday, up 192 points to 6.8314, which was more than a month high. However, the US dollar index stabilized and once rose to 96.7, and the CNY exchange rate with the US dollar. The softening, the Asian city closed at 6.875, down 245 points per day, the night market closed at 6.8675. Offshore Renminbi (CNH) had risen 241 points in the early session to 6.8368, which was weaker towards noon. It had fallen 192 points to 6.8801 and reported 6.8702 at 11:30 on Friday.
The uptrend is short-term or has peaked
Ye Zeheng, a senior foreign exchange market strategist in East Asia, believes that the Chinese dollar will meet during the G20 summit in Japan at the end of this month. The RMB has rebounded sharply in recent days. It is believed that the Sino-US trade war has temporarily eased. The rise has already peaked in the short term. It is expected that the RMB will move up and down between 6.85 and 6.9. He expects that China and the United States will have little chance of reaching an agreement on the G20, and there is still uncertainty in the trend of the RMB market.