In recent days, the specific reason for the continuous fall of the RMB against the US dollar is not clear, because the exchange rate issue involves more than economic issues.

It is the Chinese government's use of the depreciation of the renminbi to reverse the deteriorating export situation, or the exchange rate movements caused by capital flows.

We believe that under the background of the worsening export situation in China, the possibility of RMB depreciation will not be ruled out. The current exchange rate movements will preclude the moderate depreciation of the RMB.

Theoretically, the monetary value of each country reflects the relative difference of the economic conditions of different currency areas. When the global economy falls into recession, the US dollar's global position and immediate counter cyclical policy make the US dollar show a relatively strong strength to other currencies.

The yuan followed the US dollar to other currencies, which has also seen a significant appreciation. From the perspective of reference to a basket of currencies and steady exports, growth and employment promotion, the Chinese government will probably release the RMB's indirect appreciation in a moderate way.

The macro view suggests that the exchange rate of the RMB against the US dollar will decline steadily, and it may fall to 6.9 within the year. There may be a depreciating space for 5%-6% in 09 years, but there will still be appreciating pressure on the RMB for a long time.