General

On July 27, the U.S. dollar index (92.7843, 0.1657, 0.18%) pulled up in a short-term, and the offshore yuan (6.5061, 0.0232, 0.36%) fell below 6.52 against the U.S. dollar, depreciating nearly 400 points during the day, a new low since April. The onshore renminbi fell below 6.51 against the U.S. dollar.

The Soochow Securities macro team pointed out to the Cailian News that the RMB exchange rate depreciated significantly late on Tuesday, but the US dollar index did not appreciate significantly. It is estimated that this is a process of pressure release caused by the recent adjustments in the domestic market. In July, as the domestic RRR cuts across the country, China-US policies began to diverge, but the RMB exchange rate was stable, and the effective exchange rate continued to stay at a relatively high level. Recently, the uncertainty in Sino-US relations and the adjustment of domestic policies have caused obvious stock market Fall, short-term signs of funds leaving the market.

Market participants also pointed out that under the mismatch of the Sino-US financial cycle, the US dollar is expected to appreciate against the renminbi. At present, the US dollar is approaching its previous high, and the pressure of the renminbi depreciation may cause foreign capital to flow out. As the global vaccination process approaches the herd immunity threshold, the economy may be less relevant to the epidemic and the vaccination process, and the subsequent growth rate of my country's exports will likely slow down, the trade surplus will narrow, and the RMB exchange rate may be under pressure.

More than one-third of the world's central banks plan to increase their holdings of renminbi reserves

The attractiveness of RMB assets is getting stronger and stronger!

Recently, the "Official Forum of International Monetary and Financial Institutions" headquartered in London released the latest annual survey report showing that about one-third of central banks in the world plan to increase their holdings of RMB as reserve assets in the future, and about one-fifth of central banks plan to increase their holdings of RMB as reserve assets. Reduce US dollar holdings.

In fact, while central banks are planning to increase their holdings of renminbi assets, foreign institutional investment has long been "moving in response to the wind" and continues to increase their holdings of renminbi assets. Statistics show that by the first half of this year, the balance of my country's inter-bank market bonds held by foreign institutions was 3.74 trillion yuan, a year-on-year increase of 49%. In the same period, the cumulative net inflow of funds from the north was 223.661 billion yuan, which was double that of the same period last year and set a record for the same period in the past five years.

The renminbi has become the third largest international currency

On July 24, the International Monetary Research Institute of Renmin University of China released the "Renminbi Internationalization Report 2021". The report mentioned that the RMB Internationalization Index (RII) was 5.02, a sharp increase of 54.20% year-on-year, setting a record high. The renminbi is used more than the yen and the pound, becoming the third largest international currency.

In the four quarters of 2020, the RMB RII was 4.10, 5.19, 5.14, and 5.02 respectively, showing a sharp rise and high volatility. During the same period, the changes in the internationalization index of major currencies were from 49.52 to 51.27 for the US dollar, from 29.84 to 26.17 for the euro, from 3.34 to 4.91 for the Japanese yen, and from 4.00 to 4.15 for the British pound.

The rapid rise of the RMB internationalization index is mainly due to China's relatively large share in the international foreign trade market and the relatively large scale of RMB cross-border settlement.

For example, in 2020, the RMB settlement value of cross-border trade under the current account reached 6.77 trillion yuan, a year-on-year increase of 12.09%, accounting for 18.44% of my country's total foreign goods and services imports and exports; globally, the share of RMB settlement in international trade was 2.91% , An increase of 18.40% over the previous year.

In addition, the scale of renminbi direct investment is also expanding. In 2020, the scale of renminbi direct investment will reach 3.81 trillion yuan, a year-on-year increase of 37.05%.