The strength of RMB rose to the highest level since June! Near the end of the year, the pressure of foreign trade enterprises to settle foreign exchange has increased sharply!

On the first day of the last month of 2021, the strong rise of RMB exchange rate caught all foreign traders by surprise

On December 1, the central parity rate of RMB against the US dollar was 6.3693, up 101 points, a new high since June. On the same day, the RMB exchange rate against the US dollar rose and fell, hitting the 6.36 mark at one time, just one step away from the year's high of 6.3565.

Last year's 7.1 was like a dream.

Since this year, the RMB exchange rate has stepped out of an "m" - devaluation, appreciation and shock. Since this year, the spot exchange rate of RMB against the US dollar has appreciated by 2.6%.

From the beginning of the year to the end of March, the RMB depreciated in fluctuations. The central parity of the RMB against the US dollar fell from 6.47 at the beginning of the year to 6.57 at the end of March, with a slight depreciation of about 1.4%.

From early April to early June, the RMB exchange rate showed a significant appreciation trend, rising from around 6.56 to 6.36, an increase of about 3%.

Since the end of June, the RMB exchange rate has entered a period of shock, with an overall slight appreciation. The central parity of the RMB against the US dollar has fluctuated from 6.46 to 6.37, with an appreciation of about 1.4%.

7.1 at the end of May last year now looks like a dream.

It is worth noting that since September, the US dollar has begun to deviate significantly from the RMB exchange rate and the US dollar index, and the RMB exchange rate and the US dollar index have strengthened at the same time.

So what we can see is that in the whole November, the spot exchange rate of RMB against the US dollar increased by 308 basis points, or 0.48%, compared with 6.4009 at the end of October.

However, the US dollar shows a strong position against other currencies, such as:

So far this year, the Turkish Lira has fallen by 45% against the US dollar and depreciated by 28.3% in November alone;

The euro once fell to the lowest level against the US dollar since July 2020;

The Australian dollar hit a three-month low against the US dollar at the end of November, and the Russian Ruble hit a six-month low;

The yen also depreciated by 9% this year, and the local currencies of Thailand and South Korea depreciated by more than 7%.

This situation is even worse for Chinese exporters settled in US dollars——

The devaluation of the currency of the importing country against the US dollar means that the import cost increases or will frustrate the importer's willingness to purchase;

It goes without saying that the currencies of exporting countries appreciate against the US dollar.

Foreign exchange settlement pressure at the end of the year

From December to the Spring Festival, the RMB exchange rate is the focus of China's export enterprises. Foreign trade enterprises are used to settling foreign exchange at high prices for the new year. The strong demand for foreign exchange settlement may support the strengthening of the RMB exchange rate.

By the end of 2020, China's export recovery will form a certain amount of foreign exchange inflow. With the change of enterprises' attitude of "holding money and watching" at the end of the year, the real demand for foreign exchange settlement increased. At the end of December last year, the rate of foreign exchange settlement soared to 70.58%. There was a large surplus in the settlement and sales of foreign exchange by banks on behalf of customers, which supported the RMB exchange rate.

CITIC Securities analyst Mingming wrote in this week's report: "considering that the foreign exchange deposits of domestic non-financial enterprises are at an all-time high, and the Spring Festival next year is earlier than in previous years, it is expected that the follow-up foreign exchange settlement peak may be advanced."

Industrial Research believes that the current RMB exchange rate is a typical buying dominant market, and it is possible for the short-term strong shock to even break through the previous high. However, different from the previous and mid-term of this round of RMB appreciation, the foreign exchange plate to be purchased is "quietly growing" and "dormant". After the lunar new year, the rigid exchange settlement plate retreats, and the RMB exchange rate is expected to repair the overestimation of relative fundamentals.

When looking forward to the exchange rate trend in 2022, the Bank of China Research Institute pointed out that under the influence of the increasing downward pressure on China's economy, the slowdown in the growth rate of foreign demand, the normalization of the Federal Reserve's monetary policy and other factors, the RMB exchange rate may face certain depreciation pressure. However, China's economy still has strong resilience, the government has sufficient policy control tools, and the approximate rate of RMB exchange rate will still fluctuate within a reasonable range.

Bosses, have you settled foreign exchange?