Foreign Trade Data Downturn In The First Month, RMB Exchange Rate Facing Dilemma

Yesterday (February 9th), a number of agencies were vocal, but the views were not consistent, and this situation also reflected that under the current macroeconomic environment, exchange rate policy is in a dilemma.

Head office of China Merchants Bank financial market Liu Dongliang, senior analyst at the Ministry, said that the real effective exchange rate of the renminbi has risen sharply, and the negative impact on exports has been fully reflected. "The declining surplus" makes the RMB exchange rate face a dilemma. However, it is expected that the central bank will still focus on maintaining stability.

　　 Actual effective exchange rate Appreciation affects exports

Against the backdrop of the Fed's gradual withdrawal from the QE, the US dollar index has risen nearly 20% since May 2014. In addition, the market generally expects that the US Federal Reserve will enter the cycle of raising interest rates in 2015. At the same time, the European Union and Japan have joined the camp of monetary easing. Most of the view is that the US dollar has entered the appreciation cycle. Under the condition of slowing economic growth in China, the RMB is facing downward pressure.

Reporters noted that since November 2014, the RMB against US dollar spot (inquiry) devaluation of over 2%. Especially since January 26, 2015, the spot exchange rate has repeatedly approached the limit.

It is worth noting that the latest figures of the General Administration of Customs show that in January 2015, the total value of China's imports and exports was 2 trillion and 90 billion yuan, down 10.8% from the same period last year. Among them, exports of 1 trillion and 230 billion yuan, down 3.2%; imports 860 billion yuan, down 19.7%; trade surplus of 366 billion 900 million yuan, 87.5% expansion. Taking into account the influence of the Spring Festival, after the seasonally adjusted, import and export, exports and imports fell by 7.1%, 1.3% and 14.4% in January.

"Generally speaking, before the Spring Festival, foreign trade enterprises will rush to work and rush ahead, so the export data in the first month of the month are usually high, and the Spring Festival is low on the same month. However, this year is abnormal, and the data in the pre holiday months are not performing well, indicating that foreign trade enterprises can not rush to work ahead of time." Liu Dongliang said that the real effective exchange rate of the renminbi has risen sharply, and the negative impact on exports should be fully reflected.

Liu Dongliang said that even taking into account the decline in prices of commodities, the 19.7% decline in imports was abnormal. The total value of imports of commodities accounted for about 25% of the total value of imports per month. Assuming that the import price was signed in December in January, the CRB index fell by about 10% in the 12 months of last year. The percentage of total imports is about 3%, which is not enough to explain the decline of China's gross domestic product in January, which can only explain the extreme weakness of domestic demand, and indicates that exports will continue to slump in the future.

Data show that from May 1, 2014 to February 9, 2015, the RMB real index (CNYR) has risen by more than 12%. During the same period, the Renminbi (RMB) was raised and depreciated to the US dollar immediately, and the total appreciation was less than 0.5%.

　　 Expert: this year RMB No big deal.

"We believe that this rising surplus will not bring pressure on appreciation of the RMB exchange rate. China's export growth in January is much lower than expected, which confirms the necessity of RMB's depreciation to some extent. Zhang Jun, director of macroeconomic research at Morgan Stanley Huaxin securities, said that it is imperative to decouple the RMB exchange rate from the US dollar to a certain extent. Against this background, the monetary authorities will tolerate moderate depreciation of the RMB exchange rate in 2015 to cope with the appreciation of the dollar and the depreciation of other major currencies (Euro, yen, etc.) due to the implementation or increase of quantitative easing.

Liu Dongliang also believes that the "declining surplus" makes the RMB exchange rate facing a dilemma. At the same time, whether the exchange rate should depreciate or depreciate will still exist. It is expected that the central bank will still focus on maintaining stability. There are many reasons for the current export predicament. If we want to stimulate exports, a slight depreciation is useless. It is necessary to depreciate significantly, such as depreciation of 10%, but at present, this is obviously not an option.

Deutsche Bank economist Zhang Zhiwei also believes that in 2015, the renminbi is unlikely to show significant depreciation. The renminbi has a slight risk of depreciation, but a strong trade surplus makes it less likely that the RMB will depreciate by more than 5%.

In addition, Lian Ping, chief economist of Bank of communications, also pointed out that the RMB is facing devaluation pressure. It is expected that the RMB will depreciate 3%~5% against the US dollar in 2015, but the possibility of a significant depreciation in the next 3~5 years is very small. In addition, the short-term devaluation of the RMB will help China's exports, but the long-term depreciation is not conducive to the globalization of the RMB and capital investment overseas.