News from Chinanews.com client Beijing on May 26th. Recently, the exchange rate of RMB against the US dollar has risen sharply, causing concern.
Renminbi appreciation advances into the 6.3 yuan era
Since April this year, the exchange rate of the RMB against the US dollar has continued to appreciate.
On May 26, the onshore RMB and offshore RMB exchange rates against the U.S. dollar fluctuated and rose. As of press time, the onshore RMB exchange rate against the U.S. dollar and offshore RMB exchange rate against the U.S. dollar Both rose above the 6.4 yuan mark and came to the 6.3 yuan era.
In addition, the central parity of the RMB exchange rate in the inter-bank foreign exchange market on May 26 was 1 U.S. dollar to RMB 6.4099, an increase of 184 basis points from the previous trading day, a record high Three-year new high, one step away from the 6.3 yuan era. 
On May 26, the central parity of the RMB against the US dollar in the inter-bank foreign exchange market.
A year has risen by more than 7,100 basis points
In May last year, the RMB exchange rate against the U.S. dollar was still at 7.1 yuan. Now that one year has passed, the RMB exchange rate against the U.S. dollar The exchange rate of the US dollar has entered the era of 6.3 yuan.
Data shows that the central parity of the RMB against the US dollar on May 26, 2020 was 7.1293, and on May 26 this year, it was 6.4099.
That is to say, within one year, the central parity of the RMB against the US dollar has been raised by 7194 basis points. 
The bank staff is counting the currency.
What does this mean?
Those who exchanged dollars last year obviously lost money. From 7.1293 to 6.4099, if you exchange 10,000 dollars, it would cost 71,293 yuan at that time, and today it only needs 64,099 yuan, which can save 7,194 yuan.
7194 yuan, which is a month’s salary for many people. Obviously, if they changed the dollar last year, they are now crying in the toilet.
Of course, due to the appreciation of the renminbi, it will be more cost-effective for ordinary people to reduce the exchange cost of traveling abroad, studying abroad, and shopping. 
Renminbi and U.S. dollar data map.
Some people are happy about the appreciation of the renminbi and others are worried.
I am happy with importing companies.
It is positive.
Wen Bin, chief researcher of Minsheng Bank, believes that the appreciation of the RMB exchange rate will reduce the purchasing costs of importing companies and increase profits.
Especially at the moment, the prices of some commodities continue to rise sharply, the prices of some varieties have reached new highs, and the cost of importing raw materials for enterprises has increased. Therefore, the appreciation of the renminbi will also reduce the pressure brought by the surge in commodity prices.< br>
I am worried about export companies.
The appreciation of RMB is not conducive to exports. Because the cost of export products increases, it affects The competitiveness of the products of export enterprises in the international market will also involve exchange rate risks, leading to exchange losses.
Tan Yaling, Dean of the China Institute of Foreign Exchange Investment, told a reporter from Chinanews.com, The appreciation of the renminbi, combined with rising raw materials and rising shipping prices, will have a greater impact on exports and will further reduce the profits and living space of small and medium-sized foreign trade companies. 
A view of Ningbo Port.
Why continue to appreciate?
Regarding the reason for the strengthening of the RMB exchange rate, Tan Yaling analyzed that the appreciation of the RMB is related to the weakening of the US dollar index, and the market’s sentiment towards the appreciation of the RMB is more serious. China’s economy continues to recover, foreign capital flows into China’s foreign exchange market and stock market, and it is common for foreign capital to use favorable opportunities for arbitrage and hedging, which has also stimulated the appreciation of the renminbi.
According to data, on May 25, A-shares rose sharply, turnover returned to one trillion yuan, and funds went northward to set a new record.
CICC Macro released a research report on the 26th, stating that since April, the exchange rate of the RMB against the US dollar has continued to appreciate. As of May 25, the cumulative appreciation has reached 2.5%. CFETS The renminbi exchange rate index rose 0.5% from the beginning of April, while the dollar index fell by about 3.5% over the same period. The weakening of the U.S. dollar index is an important driving factor for the recent appreciation of the RMB against the U.S. dollar.
CICC Macro stated that in March against the backdrop of a strong US dollar, overseas institutions slightly reduced their holdings of domestic bonds, and they returned to increase their holdings in April, which also supported The appreciation of the renminbi since April. 
Map of a package of currency data.
Will it continue to appreciate?
Regarding the RMB exchange rate trend, CICC Macro said that as the US dollar fluctuates weakly in the short and medium term, the RMB exchange rate against the US dollar will be driven by two-way fluctuations. In addition, looking forward to the second half of the year, with the inclusion of Chinese government bonds in the FTSE Russell Index starting in October, it will bring passive capital inflows. However, as the global recovery deepens, foreign production capacity recovers and import prices rise, the current account surplus is expected to be lower than 2020, growth momentum may slow down, and structural problems of imperfect and uneven recovery may be fermented. , The economy may face adjustment pressure. The room for further appreciation of the renminbi may be limited, and it is necessary to be alert to a certain degree of callback risk, but it is not too much to judge the downward pressure on the renminbi exchange rate.
Tan Yaling also believes that the RMB exchange rate will continue to appreciate sharply in the futureThere is not much room, and the current round of RMB appreciation has a long period of time, and it also faces pressure to repair.
On May 23, Liu Guoqiang, deputy governor of the central bank, pointed out in a reporter’s question on the RMB exchange rate that since the beginning of this year, the RMB exchange rate has risen and depreciated. The equilibrium level has remained basically stable. At present, my country’s foreign exchange market is autonomously balanced, the RMB exchange rate is determined by the market, and the exchange rate is expected to be stable. The future trend of the RMB exchange rate will continue to depend on market supply and demand and changes in the international financial market, and two-way fluctuations will become the norm. 
Renminbi Data map.
Official intensive voices
On May 21, the Financial Stability and Development Committee of the State Council held its 51st meeting to clearly further promote the marketization of interest rates and exchange rates Reform to maintain the basic stability of the RMB exchange rate at a reasonable and equilibrium level.
On May 23, Liu Guoqiang pointed out that the People’s Bank of China has perfected a managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies. Both the current and future periods are suitable for China’s exchange rate system arrangements. The People’s Bank of China will focus on expected guidance, play the role of exchange rate adjustment macroeconomic and automatic balance of payments stabilizer, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.
Tan Yaling pointed out that recent remarks about “RMB will appreciate in the medium and long term” have contributed to the appreciation of the RMB. The central bank’s propaganda at the weekend is also an important part of the recent trend of the RMB exchange rate. Kind of correction. Therefore, market expectations need to be stabilized.
What do you think about the appreciation of the renminbi?
(The original title is “Advancing into the 6.3 Yuan Era! What is the value of RMB appreciation?”)