In January, the trading volume of the interbank foreign exchange market continued to grow, and the RMB foreign exchange spot market remained active. At the same time, the U.S. dollar index bottomed out**, the RMB exchange rate stabilized slightly**, and the domestic foreign exchange market remained stable. In the market, active foreign exchange selling has expanded, and spot trading volume has rebounded, although market liquidity has tightened slightly. Interest rate differentials between China and the United States widened again, while swap points for the long-term CNY fell slightly.
The steady growth of the interbank foreign exchange market shows the market's continued confidence in the renminbi and the activity of the foreign exchange market. Despite the slight pressure on market liquidity, it also reflects the increased demand for the RMB, which is critical to the internationalization of the RMB.
However, it is important to pay close attention to the possible impact of the US dollar index and the widening of interest rate differentials between China and the United States on the market. We need to respond to changes in the international situation in a timely manner and flexibly adjust foreign exchange policies to maintain the stability of the RMB exchange rate and the smooth operation of the market.
Overall, despite some volatility in the forex market, the overall situation is positive. We need to remain vigilant and respond flexibly to market changes to ensure the stability of the renminbi and the enhancement of its international status. In the case of volatility in the foreign exchange market, we need to think about how to better manage risks and protect the stability of the RMB.