Attacking four consecutive checkpoints, the RMB exchange rate staged a "strong breakthrough" trend

The RMB exchange rate staged a "strong breakthrough" market on July 25th. On the morning of the 25th, the onshore RMB/USD exchange rate opened and rose nearly 300 points, approaching the 7.14 level; The offshore RMB/USD exchange rate rose nearly 400 points in the short term, breaking through four levels of 7.18, 7.17, 7.16, and 7.15 in a row, setting a new high for a week.
This sharp rise continued into the evening of the same day. On the evening of the 25th, the onshore RMB/US dollar exchange rate continued to break through, briefly rising above the 7.14 mark, up nearly 500 points from the closing price on the 24th; The offshore RMB also regained the 7.14 level against the US dollar, with a maximum recovery of over 500 points within the day.
The heavyweight policy signal came, and the foreign exchange market responded, and the renminbi quickly "regained its lost territory". Regarding the RMB exchange rate, the Central Political Bureau meeting held on July 24th reiterated the need to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Industry analysts believe that this meeting has injected a "strong shot" into RMB assets, and as the Federal Reserve's interest rate hike approaches its end, the Chinese economy and RMB assets may experience a "re valuation" in the second half of the year.
Zhong Zhengsheng, Chief Economist of Ping An Securities, believes that recent measures such as the State Administration of Foreign Exchange's upward adjustment of macro prudential adjustment parameters for cross-border financing have released the policy intention of maintaining stable exchange rates. With the end of the Federal Reserve's interest rate hike and the market's "revaluation" of the Chinese economy and RMB assets in the second half of the year after this meeting, the RMB exchange rate has a foundation to stop falling, stabilize, and even rebound.
For the subsequent trend of the RMB exchange rate, Chang Ran, a senior researcher at Zhixin Investment Research Institute, believes that the exchange rate policy in the second half of the year will aim to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level, with expectation management as the core, comprehensive implementation of policies and stable expectations, and necessary correction of market cycles and unilateral behavior, firmly preventing major fluctuations in the exchange rate.
Chang Ran stated that in regulating the excessive appreciation and depreciation of the RMB, exchange rate management tools are relatively abundant, including but not limited to activating the countercyclical factor of the central parity rate, adjusting the foreign exchange reserve ratio of financial institutions, adjusting the foreign exchange risk reserve ratio, issuing offshore central bank bills, and adjusting macro prudential adjustment parameters for cross-border financing of enterprises.
Subsequent macroeconomic control policies still need to be appropriate, sustained, and strengthened to consolidate the achievements of economic recovery and consolidate the foundation for economic stability and improvement. Sheng Songcheng, former director of the Investigation and Statistics Department of the People's Bank of China, recently stated that although the RMB exchange rate has depreciated recently, it has not deviated from the fundamentals. The People's Bank of China has also taken comprehensive measures to manage expectations, and the foreign exchange market is generally stable, with financial institutions, enterprises Residents' foreign exchange settlement and sales behavior is rational and orderly, and market expectations are basically stable. With the smooth economic cycle and new breakthroughs in high-quality development, China's economic operation continues to stabilize, and the RMB exchange rate will still maintain two-way fluctuations and dynamic equilibrium at a reasonable and balanced level.