This week, the yuan has seen an unexpected **, falling by more than 500 points. This has raised concerns and questions about the trend of the renminbi. But let's look at it from a broader perspective. Recently, the RMB has maintained the highest momentum for several consecutive weeks, and the increase has gradually decreased, which may be a normal manifestation of the RMB's own adjustment. This time** may only be temporary and requires further observation.
There are a lot of uncertainties in the RMB market, the most important of which is the upcoming meeting of the Federal Reserve. Despite the fact that the Fed will not raise interest rates again, there is still the possibility of surprises. The Fed's expectations for future interest rates can also have an impact on market sentiment. As a result, the exchange rate market is likely to continue to fluctuate until the end of the Fed meeting. However, in the medium to long term, the trend of the RMB exchange rate is mainly affected by the economic conditions of the two countries.
Recently, China's Caixin PMI data showed that the PMI of both the manufacturing and service sectors exceeded 50 and entered the expansion range. This shows that China's economy is improving. However, we must be aware that China's economy is currently in a period of transition. In the past, China's economic growth has been largely dependent on investment and investment, including in infrastructure and real estate. However, China's export growth has been limited by weak foreign demand. As a result, China is actively adjusting its economic structure to one that is driven by domestic demand.
In this process of economic transformation, economic fluctuations and exchange rate fluctuations are unavoidable. At the same time, China is also focusing more on domestic demand growth. The move will reduce over-reliance on real estate and boost the vitality of the domestic market. Although the economy and exchange rate may fluctuate in the short term, in the medium to long term, China's economic transformation will provide favorable support for the yuan.
Discussions about the rising share of payments in the US dollar and de-dollarization are also of concern. According to data published by the SWIFT system, the share of payments in the US dollar reached 47 in October this year25%, significantly higher than the level of half a year ago. However, we cannot take this to mean that the de-dollarization strategy has failed. In fact, the increase in the share of the US dollar is mainly due to the decline in the share of the euro, rather than the substitution of other currencies.
On top of that, more and more countries are paying bilaterally** in their own currencies instead of using US dollars. This means that the diversification of payment systems is gradually advancing. At the same time, China's renminbi also plays an important role in the global payment system, ranking fifth in the world in terms of the proportion of renminbi payments, although down from the previous month, it still remains at 36% level. But this does not mean that the international status of the renminbi is threatened. On the contrary, the development of China's own payment system and the promotion of the digital yuan will further promote the use of the yuan in the international environment.
Against the backdrop of changes in the global economic landscape, countries are working hard to promote financial diversification and de-dollarization. However, it is a long and complex process that requires consistent effort. In this process, the internationalization of the renminbi will play a positive role, not only to enhance China's economic strength, but also to contribute to the stability and prosperity of the global financial system.
Despite the recent emergence of the renminbi, we should look at the issue from a more macro perspective. The movement of the renminbi is influenced by a variety of factors, including economic conditions, market volatility and the process of internationalization. By actively adjusting the economic structure and promoting financial diversification, China is constantly improving the international status of the renminbi. While there may be some volatility and challenges in the short term, the RMB is expected to continue to strengthen in the long term.
My conclusion is that the trend of the renminbi is a comprehensive reflection of a variety of factors and needs to be considered comprehensively. By actively promoting economic transformation and financial diversification, China is well positioned to meet the challenges and make the renminbi play a greater role on the international stage. At the same time, the global trend towards de-dollarization is gradually strengthening. Therefore, we should maintain confidence in the future and believe that the renminbi will continue to strengthen, driven by China's steady economic growth.