On September 25, the offshore RMB exchange rate broke through the 7.0 mark, with a minimum of 6.9963, marking another significant rebound in the RMB exchange rate. Multiple financial institutions analyzed that this round of appreciation mainly benefited from the Federal Reserve's interest rate cuts and the favorable domestic policies, further boosting market expectations for RMB appreciation and driving up foreign exchange settlement demand. Data shows that the scale of foreign exchange that has not yet been settled overseas may be as high as 500 billion USD. This scale could accelerate settlement in the context of continued RMB appreciation in the future, propelling the upward trend.
Mingming, the chief economist of CITIC Securities, stated that the Federal Reserve's interest rate cut policy is a key factor in RMB appreciation. Coupled with a series of economic support policies and recovery expectations in China, the RMB exchange rate has achieved steady appreciation. In addition, a report by CCB Capital also pointed out that although the US Dollar Index has recently fallen, and global currencies have passively appreciated, the appreciation of the RMB is not only influenced by the weakening of the USD but also by the rapid increase in market demand for RMB settlement.
The impact of RMB appreciation on exports has attracted much attention. According to the analysis of BOJ Securities, although the RMB appreciated against the USD, the exchange rate index against multilateral currencies continued to decline, limiting the impact of RMB appreciation on export competitiveness. However, export companies still need to be wary of the impact of exchange rate fluctuations on their financial situation, especially for those without hedging exchange rate risks, as they may face exchange losses.
The uncertainty of the RMB exchange rate in the future still exists. Tao Chuan, an analyst at Dongwu Securities, predicts that if China's monetary policy further loosens in the second half of the year, it may exert depreciation pressure on the RMB exchange rate. Therefore, the exchange rate trend still requires close attention to policy changes and the dynamics of the global economic environment.
Overall, the RMB appreciation trend remains strong in the short term, and the 500 billion USD settlement demand may continue to play a driving role under multiple favorable conditions.
