Besides RMB, East Asian currencies are also plummeting
Recently, the RMB exchange rate fluctuates frequently. In the East Asian currency market, besides RMB, other currencies are also plummeting. In the first four months of this year, the foreign exchange market was generally stable, and the RMB exchange rate was basically stable at a reasonable and balanced level. However, since the middle of May, with the U.S. Dollar Index surging and the domestic economic recovery not as expected by the market, the pressure of RMB devaluation has increased, and the offshore RMB exchange rate against the US dollar once fell below 7.28. Recently, the onshore and offshore RMB exchange rates against the US dollar have shifted from declining to fluctuating, and on July 4th both closed at the 7.22 level. The China Foreign Exchange Trading Center has been authorized to announce that the central parity rate of RMB has also risen for several consecutive days.
Although the short-term volatility of the RMB exchange rate has increased, it has solid fundamental support. With the gradual deepening of exchange rate marketization reform, market awareness and expectations of two-way fluctuations in exchange rates have gradually formed. China has abundant macroeconomic policy control tools that can effectively address potential risks.
Although the RMB has depreciated, China's foreign exchange market is expected to remain stable, with rational and orderly foreign exchange trading behavior among market entities, and cross-border fund flows still maintaining basic balance.
Overall, China's foreign exchange market is becoming increasingly mature and resilient.
