Recently, the renminbi began to show signs of strength as the world’s major developed countries’ monetary easing policies brought about trade improvement and the Chinese economy bottomed out. The amount of renminbi buying transactions began to increase gradually in November 2012, and the renminbi’s movement towards the US dollar is also setting a new record.

According to data from the foreign exchange trading center, the overall appreciation of the Renminbi market in the spot market yesterday continued the momentum of recent appreciation. The US dollar quickly fell after the opening of the renminbi and reached 6.2218 at 13:09, once again setting a new low for exchange reform. According to media reports, the exchange rate also hit a 19-year low. The renminbi against the US dollar fell after it soared and finally closed at 6.2262.

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A new wave of RMB appreciation?

Last year, the RMB exchange rate fluctuates violently. The RMB exchange rate against the US dollar experienced three stages of narrow fluctuations, depreciation, and revaluation. The two-way volatility hit a new high since the exchange rate reform, and market appreciation and depreciation expectations are expected to occur alternately.

Judging from the changing trend, since the end of July last year, the RMB has changed from a weak position in the first half of the year and the pace of appreciation has accelerated markedly. In November last year, the spot exchange rate of the RMB against the US dollar hit a 1% volatility limit for 20 days within 22 trading days. Since the beginning of this year, the exchange rate of the RMB against the US dollar has risen slightly.

Mei Xinyu, a researcher at the Ministry of Commerce’s Institute of International Economics and Trade Cooperation, pointed out that multiple factors have caused the current appreciation of the renminbi, including: the trend of the Chinese economy’s soft landing has become more pronounced, and the optimism of the Chinese economy is expected to rise; the US fiscal cliff has passed and the global market risks have The decline.

Industrial Bank chief economist Lu political commissar [microblogging] pointed out that the current trend of RMB exchange rate, mainly the market trading reasons, is not a fundamental reason, because as in the past, regardless of how the RMB spot market changes in the long-term market are presented Devaluation.

“Mainly, the RMB exchange rate against the US dollar reversed at the end of August last year and suddenly appreciated. There is a large amount of dollar positions that need to be closed off. Due to the daily fluctuations, the daily dollar positions cannot be closed, resulting in the accumulation of a large number of dollar positions. This caused a large number of RMB exchange rate fluctuations against the US dollar in November last year, said Lu Zhengchen.

Lu political commissar pointed out that after the current excessive dollar position has been closed down, the market will return to calm, and the dollar position of trade appears to make the 2013 renminbi lack a fundamental basis for continued appreciation.

Bank of Communications chief economist Lian Ping pointed out earlier that changes in market expectations have contributed to this round of RMB appreciation.

"As China's economy recovers, the trade surplus widens, and the price inflection point has passed, the devaluation of the renminbi is expected to decrease, and the introduction of the quantitative easing monetary policy by the United States has enhanced the expectation of the depreciation of the dollar," he pointed out.

From the external environment, the new round of monetary quantitative easing competition also affected the appreciation of this round. Wen Bin, head of the Institute of International Finance of the Bank of China, also believes that the trend of international capital flows to emerging market economies such as the Asia-Pacific region is clear, which will bring pressure on the appreciation of the renminbi.

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Exchange rate tends to two-way fluctuations

According to statistics, since the RMB exchange rate reform in 2005, the RMB has appreciated about 5% against the U.S. dollar every year, and in recent years, the appreciation has been slowing down. In 2010, 2011, and 2012, they were approximately 3.63%, 4.7%, and 1.02%, respectively.

At the end of last year, market participants suggested that the renminbi exchange rate should enter the equilibrium range from unilateral appreciation.

The recently convened Central Economic Work Conference put forward “keeping the RMB exchange rate basically stable”. This position set the tone for the RMB exchange rate movement in 2013.

The market generally predicts that the renminbi exchange rate will rise slightly this year, by 1% to 2%, driven by the rapid increase in China’s economic growth.

A number of experts predict that the RMB exchange rate will maintain a modest upward trend this year on the basis of the central bank's continued implementation of a stable monetary policy and a domestic economic recovery. Two-way fluctuations will remain the most significant feature of the RMB exchange rate in the near future.

Liu Ligang, chief economist of ANZ Bank, stated that during the 7-year appreciation of the renminbi, the nominal appreciation of the renminbi against the US dollar has reached 25%, and the actual appreciation has reached 30%. The possibility that the RMB exchange rate is approaching equilibrium will continue to rise sharply. It is expected that the RMB will appreciate by approximately 1.5% in 2013.

Lian Ping pointed out that a small, stable appreciation of the renminbi will help China obtain low-cost resources and facilitate the implementation of the “going out” strategy, which will benefit China’s medium and long-term economic development.

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The impact of RMB appreciation on non-ferrous metals related industries:

Zhang Ming, an associate researcher at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences: This year, the appreciation of the renminbi will be between 2% and 3%, which is less than 5% in the previous two years.

If the renminbi continues to appreciate, it will have an impact on non-ferrous metals-related industries:

1. The foreign exchange liability industry will obviously benefit, mainly from the trading industry. Since trading companies have more foreign exchange liabilities (especially US dollar liabilities), the appreciation of the renminbi will bring exchange gains and losses to these industries. The

2. Imported raw materials or components will also benefit from imported industries, mainly including iron ore imports, cars (imports of some important components), crude oil imports, and other industries. As these industries need to import relevant raw materials and components every year, the appreciation of the renminbi will cause the costs of these industries to drop to some extent.

3, investment products industry will be subject to a certain amount of funds, including land value of real estate, park development and other industries, resources, resources, coal, non-ferrous metals and other industries. Due to this modest appreciation, offshore funds may gain appreciative gains from investing in land or property owned by companies in these industries, thereby increasing the attractiveness of funds to these investment products industries and triggering price increases. .

4. The traditional export-oriented industries are directly affected, including household appliances, machinery and other products. Because the rising costs caused by the appreciation of the renminbi will result in a drop in the profitability of these industries, but only a modest appreciation of 2% has little effect. The reduction in costs and the appropriate transfer of prices will make companies in these industries, especially leading companies, more competitive. Strong anti-risk ability.

5. The internationally priced industries will be subject to certain shocks, including non-ferrous metals that are fully internationalized, some internationally priced petrochemicals, iron and steel, electronic components and other industries. Because the prices of these industries are greatly affected by international prices, Therefore, the appreciation of the renminbi will reduce the selling prices in the case of renminbi denomination, resulting in a decline in profits.

6. Industries that substitute imported products will also be adversely affected, including automobiles, construction machinery, steel, and home appliances. The competition between the products of these industries and imported products is fierce, and the appreciation of the renminbi will lead to a decrease in the quotations of foreign currencies for foreign products, which will result in a certain decline in the competitiveness of local products and further affect the profitability of these industries.