Zhou Hongli, an economist at DBS bank, told the great wisdom news agency by e-mail that the intervention of the central bank reflected its desire to curb the appreciation of the renminbi and the determination to prevent the influx of hot money before expanding the trading area. However, this does not mean that the policy will shift to the direction of weakening the RMB.

　　 Foreign exchange policy The position has not changed.

Zhou Hongli analysis pointed out that, first of all, RMB appreciation The annualized rate reached 4.4% in the fourth quarter of 2013, significantly higher than the 2.1% quarter average in the past two years. This pace was obviously too fast, which caused pressure on exports and manufacturing, and the HSBC managers index fell to the 48.3 lowest point in 7 months in February. All the subsidiary indexes also reflected the reduction of new export orders.

Second, the strong appreciation of the renminbi has attracted a lot of money. Capital inflow 。 In February 25th, the data released by the safe showed that the surplus of Chinese banks in January this year amounted to about $76 billion 300 million, reaching the highest level since 2013. To tighten liquidity, the people's Bank of China restarted the repurchase last week for the first time in 8 months. Excessive capital inflows have made China's currency management more complicated. Yi Gang, vice president of the central bank, suggested that the marginal cost accumulated by foreign exchange has already exceeded the marginal revenue.

Third, in addition to capital inflows, the strong appreciation of the renminbi is also reflected in the difference between the spot rate and the middle price on the shore, as well as the huge price difference between the onshore and FOB prices before the callback. The RMB premium (onshore RMB Offshore RMB) reached 364 points in February 7th, the highest point since January 2013. Such a market is expected to cause the Chinese government's immediate expansion of the trading range, leading to a one-off sharp appreciation of the renminbi.

"In view of this, the people's Bank of China has the power to curb the expected appreciation of the renminbi and narrow the premium difference." Zhou Hongli said that in order to achieve this goal, the central bank announced in February 19th that it would expand the US dollar to RMB trading range this year. Since then, the central bank has been raising the middle price. As a result, offshore renminbi prices were forced to rise as a result of trading outside the lower limit in January 6th and February 19th. Similarly, the spot exchange rate on shore is also forced to move upward from the lower limit of the trading range. In February 25th, the exchange rate between the RMB against the US dollar and the offshore renminbi against the US dollar finally coincide with the middle price. This situation occurred in April 2012 when the trading range expanded from + 0.5% to + 1%.

　　 The time to expand the trading range is coming.

Zhou Hongli expects the RMB trading range to double, or 2% above the median price. A larger trading range means that currencies will be more flexible before the US Treasury report is released in April.

However, Zhou Hongli has reservations about whether renminbi transactions will fall again after the expansion of the trading range in 2012. He pointed out that at that time, the euro zone government was trying hard to resist the impact of tightening policy in the second quarter of 2012. Now that the euro zone is out of recession, G20 is also striving to strengthen the global economic recovery. At the same time, with the slow recovery of the US economy, China's current trade surplus is expected to remain at 282 billion US dollars or 2.6% of GDP.

　　 The slow appreciation trend will remain unchanged.

Equally important, capital inflows will continue to be supported by high interest rate differentials. Zhou Hongli said that the interest rate difference between China and the United States is expected to remain the same, given that China's risk premium is on the rise and the US Federal Reserve's interest rate increases are less likely. The current situation is not comparable with the weakening of the renminbi in mid 2012. At that time, due to the significant decline in China's trade surplus, the people's Bank lowered interest rates twice and lowered the reserve requirement ratio for the three time.

Taking into account the above and looking forward to the future, Zhou Hongli predicts that the exchange rate of the offshore renminbi and offshore renminbi will remain at the current level or below in the new trading range in 2014. And continue to predict that the RMB exchange rate will reach 5.97 by the end of the year. At the same time, PBC is expected to intervene more frequently in the market, resulting in higher foreign exchange volatility. The medium-term goal of two-way volatility is consistent with the people's Bank of China's ability to develop convertible currencies and enhance the elasticity of foreign exchange rates.