Abstract It is said that in the new round of currency wars, the United States seems to be the most "frugal" country, and has not added chaos in the name of "increasing interest rates." Obviously, interest rate cuts and exchange rate depreciation have become the majority of central banks...
Some people say that in the new round of currency wars, the United States seems to be the most "frugal" country, and has not added chaos in the name of "increasing interest rates." Obviously, interest rate cuts and exchange rate depreciation have become the choice of most central banks, even if China has always maintained neutrality. Last week, the spot exchange rate of the RMB against the US dollar approached the limit line four times in five trading days. Where will this war bring the world and the Chinese economy? It is confusing at the moment. The world economy is on a chaotic journey?
The probability of error in monetary policy rises and is carefully becoming an important criterion
Last week, Singapore, Russia and other countries joined the loose currency battle, and the exchange rate fluctuated. Some people say that this is a disguised currency war, and in the eyes of many economists, the word seems to have gone too far. However, in any case, the world economy will embark on a chaotic journey.
"The decline in exchange rate is only an appearance, and the reasons for the interest rate cuts or QE policies of the countries are derived from the self-rescue of the economic downturn in various countries." Zhao Qingming, an expert on international financial issues, said frankly. Indeed, although the new monetary policies of all countries have “suddenly happenedâ€, in the eyes of analysts, the reason is all to “boost the domestic economyâ€.
However, in a state of high degree of correlation in the global economy, the actions of each country may cause changes in the economic status of other countries. In the future, where will the world economy go?
Lian Ping, chief economist of the Bank of Communications, believes that the current global monetary policy differentiation is very obvious. The future trend of the United States is not further loose, but may gradually tighten between smooth and neutral. However, countries such as Europe and Japan may continue to be loose.
Quan Dejian, a senior economist at UOB, predicted that such a chaotic and divergent day would last at least half a year. In this period, the probability of error in monetary policy made by governments will also rise, and cautiousness has become an important criterion for countries to formulate policies.
However, Zhao Qingming believes that although any decision during the differentiation period may make the global economy proud and loses, but differentiation is normal in the development of the global economy, there is no need to worry too much.
Will the renminbi be the next ruble?
It fell more than 300 points per day, which is not a problem for the renminbi.
Looking back last week, the RMB exchange rate showed four “close to the limit†in five trading days. The continuous decline of nearly 2% has been the first time since the exchange reform. The debate over whether the RMB will become the next ruble is rampant. Many economists said in an interview with the Beijing Morning Post that the renminbi did not have the possibility of a sharp fall.
"When the renminbi plummets, it is not how much the price of the exchange rate in the middle of the day is discounted, but how much it is discounted compared to the closing price of the previous trading day." In Zhao Qingming's view, the floating range of the renminbi has not yet reached a very serious point, that is, The exchange rate fell by more than 300 points per day. "This is not a problem for the renminbi."
Zhao Qingming believes that the decline of the renminbi is mainly because the US dollar is too strong. The renminbi itself has no special sharp depreciation. China's endogenous consumption power has not weakened. The renminbi exchange rate is still relatively stable, and the possibility of a sharp devaluation is small.
Quan Dejian also believes that the situation between the renminbi and the ruble is different, not only because of sanctions, but also because Russia is very dependent on oil exports, and China has no particular dependence. In the past 10 years, the RMB exchange rate against the US dollar has appreciated by 30%. Last year, the RMB depreciated 2.4% against the US dollar. This year, the depreciation rate may reach 5% or so, and 6.30 yuan will be the limit of depreciation. Therefore, it can be said that the exchange rate of the RMB against the US dollar remains very stable.
And will there be another "Ruble incident" in the world? Quan Dejian said that the probability of this happening in major economies is not large, but the monetary policy dominated by global easing will allow large amounts of capital to return to the US to hedge, which will bring more impact to some emerging countries. “The impact of Latin American countries such as Argentina and Venezuela is even more pronounced.â€
The impact on the Chinese economy is minimal?
Sandwiched in the dollar and the euro, it’s a bit "difficult to ride the tiger"
How much impact does the RMB depreciation have on the Chinese economy? In the eyes of economists, the fall in the exchange rate will have a certain impact on China's exports and liquidity. However, the overall decline is not large, so the impact on China's economy can be said to be minimal.
The long-term appreciation of the RMB exchange rate has attracted countless foreign investment into China, which has promoted China's economic development. The formation of foreign exchange has also become an important source of China's currency liquidity. However, since last year, the increase in foreign exchange holdings has fallen sharply, and even in the past few months, there has been a negative growth in foreign exchange holdings. If the hot money flees in large numbers, it is likely to have a huge impact on China's economic and financial system.
Guan Qingyou, the chief macro researcher of Minsheng Securities, said that the possibility of a sharp depreciation of the renminbi is very low, and because the renminbi exchange rate is regulated, the probability of a large amount of capital flight is low. The problem of liquidity can be hedged by the central bank's RRR cut, MLF, PSL and other currencies. The single factor of the RMB exchange rate will not restrict the liquidity of the stock and bond markets.
The depreciation of the exchange rate is conducive to exports. As an important force of the Chinese economy, will China deliberately depreciate and stimulate exports?
In this regard, Guan Qingyou said that although this is a self-help plan, the RMB exchange rate is a bit "difficult to ride the tiger." This is not only because China’s debt has not been de-constructed, but has once again expanded substantially. The debt black hole continues to devour credit resources. The interest rate is much higher than that of developed countries after de-leveraging, attracting too much arbitrage funds, plus the government’s bottom line thinking about the economy. Provided a risk-free guarantee for the interest-bearing funds, and the rising demand for RMB assets naturally led to the continuous appreciation of the RMB exchange rate.
Canada
2015.1.21
The Bank of Canada fell 25 basis points to 0.75% without warning.
The Canadian dollar plunged more than 300 points against the US dollar on the day.
United States
October 2014
The United States withdrew from QE and pressed the switch of this round of printing. The industry is expected to embark on a road of interest rate hikes to further influence the world economy.
The US dollar has risen against other major currencies, and the US dollar index has climbed steadily, once breaking through the 95 high.
Peru
2015.1.22
The Peruvian central bank cut interest rates by 25 basis points to 3.50% on Thursday, as economic growth was lower than it should be and inflationary pressures eased.
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