Not so long ago,RMBGloballyMoney marketThe performance has attracted a lot of attention. In November 2023,The exchange rate of the Chinese yuan against the US dollarAn astonishing reversal was achieved, accumulating more than 2,000 points. This means:RMBSuccessfully overtook the euro to become the second largest in the worldCurrency, second only to the US dollar. One can't help but wonder what caused such a dramatic changeRMBWhy is it so large?
RMBExchange rate movements are affected by a combination of factors. Among them, the most important factors are:Balance of paymentsStatus, i.e. the difference between a country's foreign exchange earnings and expenditures. In recent years, our countryBalance of paymentsThere has been a surplus, i.e., foreign exchange earnings are greater than expenditures. According to ChinaForex tradingdata of the center, in the first 10 months of 2023, of our countryBalance of payments surplusReached 1$2 trillion, a record high. This is mainly thanks to our countryEconomyand continued inflows of foreign capital. In addition, China's active promotion of the "dual circulation" strategy has also played a positive role, increasing domestic consumption andInvestments, reducing dependence on external demand. These factors are strengthenedRMBofSupply and demand, pushedRMBExchange rate of **.
Another important factor is:Interest ratesLevel. According to the Chinese peopleBanksdata, the first 10 months of 2023, the one-year period of our countryDeposit interest ratesKeep it at 15%。In contrast, the U.S. Federal **Interest ratesRevised up to 125%, ECB'sDeposit interest ratesLowered to -075%。This means that of our countryInterest ratesThe level is relatively high, so that:RMBAssets are more hasInvestmentsattractiveness, increasedRMBdemand, drivenRMBExchange rate of **.
In addition,U.S. dollar indexThe change is also rightRMBThe exchange rate had an impact. U.S. dollar indexis a major measure of the dollar against a basketCurrencyIndicator of the exchange rate. In recent years,U.S. dollar indexShowing a downward trend. According to the U.S. Department of Commerce, in the first 10 months of 2023, the U.SEconomySlowing growth, rising inflation, widening fiscal deficits, and intensifying political divisions have all undermined confidence in the dollar, resulting inU.S. dollar index**。Due to the weakness of the dollar, making otherCurrencyRelatively more valuable, added othersCurrencydemand, driving the otherCurrencyExchange rate of **, including:RMB
First of all,RMBThe sharp rise is conducive to reducing the cost of imports and increasing the domestic residentsPurchasing powerand welfare levels. Due toRMBappreciation, useRMBThe cost of exchanging foreign currency is reducedImported goodsKimonoThe relative decline of the ** of the service. This allows domestic consumers to buy more foreign goods for less moneyKimonoservices, such as imported food, clothing, electronics, tourism, etc. This has improved the quality of life and well-being of the country's residents.
Secondly,RMBThe sharp rise is conducive to reducing domestic production costs and improving the competitiveness and profitability of domestic enterprises. Due toRMBappreciation, in exchange for foreign exchangeRMBThe cost of exporting goods increasesKimonoThe relative rise of the service **. This is not good for consumers abroad, who need to spend more money on Chinese goodsKimonoBusiness. This will reduce the export earnings of domestic enterprises and increase the pressure on exports. Enterprises need to improve their competitiveness by improving product quality, innovating technology and opening up markets.
In addition,RMBThe surge is conducive to enhancing international status and enhancing international influence. Due toRMBappreciation,RMBofPurchasing powerEnhanced, International** andInvestments's settlement capacity has improved. This is a good thing for the international community, they can use moreRMBParticipate in Chinese markets and projects to enhance cooperation and mutual trust with China.
However,RMBThere are also some adverse effects on the sharp rise, which require our vigilance and prevention. On the one hand,RMBThe sharp rise may trigger domestic inflationary pressures and decreaseEconomyGrowth. Due toRMBappreciation, domestic goodsKimonoThe relative decline in the number of domestic producers, which may reduce the income of domestic producersInvestmentsWill. On the other hand,RMBThe surge may trigger a foreign oneFriction, increaseEconomyUncertain. Due toRMBappreciation, China's export competitiveness declines, and foreign import competitiveness rises, which may reduce the profits and employment of foreign producers.
RMBThe big rise reflects our countryBalance of paymentsImprovement of the situationInterest rateslevel of superiority as wellU.S. dollar indexThe combined effect of ** and other factors. The sharp rise of the renminbi has had an important impact on domestic and foreign economic development. We need to strengthen structural reforms in the country, improveEconomyThe endogenous power and anti-risk ability to expand the domestic market demand, promote consumption upgrading and industrial upgrading, and enhance the competitiveness and innovation ability of enterprises. At the same time, we also need to strengthen international cooperation and promoteFinanceThe opening and reform of the market has been improvedRMBinternational status and influence. Only then will we be able to cope betterRMBThe challenge of the surge to achieve sustainabilityEconomyDevelopment and benign exchange rate operation.