What Is The Biggest Obstacle To The Internationalization Of RMB?

Yi Gang, vice president of the central bank, attended the spring annual meeting of the International Monetary Fund (IMF) and the world bank in Washington, and held a thematic discussion on "50 year development: SDR under the international monetary system".

In addition to topics discussed in the topic of the day.

After the meeting, Phoenix Financial reporter put forward "promoting RMB" to vice president of the central bank, Yi Gang.

What difficulties will arise in the process and how to solve them?

Due to the large number of live media, guests can not answer all the questions one by one.

But referring to the process of RMB internationalization as the medium and long term strategy of the country, Yi Gang's plan, which originally planned to leave the venue, told reporters that "steady progress" and the two tone of the emphatic tone reiterated the key four words.

The attendees also kept echoing, and the four words of "steady progress" suddenly made the scene lively and lively.

The decline in China's stock market poses a threat to the recent calm of the renminbi.

Since the devaluation of 20 months ago, the RMB exchange rate is at its most calm.

According to the Spanish foreign bank (BBVA) and the ANZ bank, if China's stock market goes further down, it may spread to the foreign exchange market, resulting in the separation of RMB from the narrow range which has lasted for nearly three months.

In addition, there are a number of other factors that may trigger the appreciation of the dollar, including China's deregulation of capital, US interest rate hikes and geopolitical tensions.

"If

People who don't want to play A shares will buy dollars or buy overseas assets, "said Xia Le, an economist at BBVA in Hongkong.

"The stability of RMB is not sustainable.

The Central Bank of China is an opportunist in managing exchange rates. When it finds the right time, it will devalue the renminbi. Next time it may be in May, the US dollar will go higher if the us further raises interest bets.

In the context of China's tightening capital controls and the weakness of the US dollar, the RMB has fluctuated from 1.1% in February, and has not changed more than 0.2% in the past week.

This is quite obvious compared with China's stock market. In the four trading days as of Wednesday, the Shanghai Composite Index has fallen by 3.2%.

Liu Shiyu, chairman of the China Securities Regulatory Commission, said at the weekend that

The behavior is resolutely attacked and never soft.

Xia Le said that since this year, Chinese policymakers have maintained the stability of the RMB exchange rate because they want to stabilize their confidence, and once the market is more confident, they will restore their depreciation.

Khoon Goh, head of Asian Research in Singapore, said that if the stock market continues to decline, the yuan will depreciate and break through the recent range.

He expects the RMB / dollar exchange rate to reach 7.1 yuan by the end of the year, and the 6.8840 yuan on Thursday night.

It is understood that the promotion of RMB internationalization is a national strategy and is a long-term behavior. Therefore, it is imperative to "push ahead"; how to understand "steady" and some short-term interests that need to be balanced in the process of pushing forward, such as maintaining the stability of exports.

Therefore, in the four key words, the key point is to push ahead, and how to advance it. It is not radical but steady.

At the same time, it also shows an attitude of China's exchange rate policy, which is responsible for the state and the world. It also seeks for a coordination and balance with the US dollar.

In addition, the process of RMB internationalization is facing some challenges and risks: the US dollar is strengthening at present. As the US economy enters a rising cycle, the position of a strong dollar will remain in the coming period.

The biggest resistance to the internationalization of RMB is the strength of the US dollar and the hegemony of the US dollar.

As the US dollar is the most powerful currency in the world, the promotion of RMB will surely challenge the hegemony of the US dollar.

From different angles, the Fed will hinder the internationalization of RMB.

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