Central Bank Basically Quit Normal Foreign Exchange Intervention

< p > the announcement of the central bank announced the expansion of the floating rate of RMB against the US dollar in the foreign exchange market. Since March 17, 2014, the floating rate of RMB against the US dollar in the inter-bank spot foreign exchange market has expanded from 1% to 2%.

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< p > "expanding the floating range of people's exchange rate is an institutional arrangement to enhance the two-way floating elasticity of the RMB exchange rate".

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< p > many experts told reporters that at present, there may be a trend of "a href=" //www.sjfzxm.com/news/index_cj.asp "two-way volatility" /a, which will reduce the arbitrage space of hot money to a certain extent.

However, some experts say that two-way floating can be achieved not only by expanding the range of fluctuation, but also by other related means and measures.

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The central bank has made it clear that the market will further play the role of market exchange rate in the future. The central bank basically quit normal foreign exchange intervention and established a managed floating exchange rate system based on market supply and demand. P

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< p > this is different from that of some market participants who fully expect the a href= "//www.sjfzxm.com/news/index_cj.asp" > marketization /a > exchange rate system, and is still a managed floating exchange rate system.

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< p > "the goal of final reform can not be regarded as complete marketization. Instead, the central bank should try to reduce normal intervention and conduct regular and timely intervention."

Zhang Bin believes that at present, the degree of domestic marketization is not high, and the international monetary system lacks public rules. If the RMB exchange rate is completely free floating, it will be frequent and violent fluctuations, which is not conducive to the real economy.

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In the view of the central bank, the reform of < a href= "//www.sjfzxm.com/news/index_cj.asp" > exchange rate system < /a > P will ultimately serve the real economy, "developing foreign exchange market, enriching foreign exchange products, expanding the breadth and depth of the foreign exchange market, and better meeting the needs of enterprises and residents."

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< p > Zhang Bin believes that there are two factors in the future deciding the process of exchange rate reform: in the short term, the cross-border arbitrage of RMB will be improved.

In the medium term, interest rate problems will also be improved.

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< p > Zhang Bin said in a recent article that "the past years of domestic experience shows that when the exchange rate of RMB against the US dollar rises or falls, the relaxation of capital flow control will lead to a large amount of capital acquiring the spread of RMB appreciation against the US dollar. Most of the content of RMB internationalization will evolve to take advantage of the unilateral appreciation of the RMB against the US dollar, which has intensified the threat to the stability of domestic macroeconomic and financial markets."

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While the central bank emphasized that "enhancing the two-way floating elasticity of the RMB exchange rate and maintaining the basic stability of the RMB exchange rate at a reasonable and balanced level" will help improve the Arbitrage Behavior and strive for greater policy space for the P reform.

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< p > "once the two-way fluctuation is conducive to managing international capital flows, preventing large scale capital flows in and out, and under the condition of better two-way capital flow, the pressure of unilateral appreciation or depreciation of the RMB will also be alleviated, which will make the exchange reform get bigger adjustment space."

Zong Liang believes that the next step is to reform the current price formation mechanism, which is still difficult to change. But if the exchange rate trend is stable, the fluctuation range of the spot exchange rate around the RMB may be completely liberalized.

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