Restarting The Foreign Exchange Market To The Full Year Old &Nbsp; RMB Appreciation By 5.5%

In June 19, 2010, the people's Bank of China announced further progress.

On the last trading day of last week, the central parity of RMB against the US dollar was 6.4716, creating a new high since the reform.

Over the past year, the renminbi has appreciated 5.5% against the US dollar.

* experts point out that the restarting of the reform has triggered significant changes in the exchange rate, which will inevitably cause short-term labor pains to export enterprises, but in the long run, it will help curb inflation and asset bubbles and promote economic restructuring.

Experts remind that after the restart of the exchange reform, the market's expectation of RMB appreciation has been strengthened, and the phenomenon of hot money pressing is obvious. This has become a major constraint on the effectiveness of China's monetary policy.

How to get rid of the intensified expectation of unilateral appreciation of RMB has become a problem that the policymakers in the second half of the reform will not be able to get around.

* experts point out that increasing exchange rate flexibility is conducive to the formation.

Some scholars believe that we can use the means of substantial appreciation to allow the RMB exchange rate to rise in a lump sum so as to solve the problem of appreciation expectation.

The current small step appreciation is just like sending out letters of invitation to the speculators.

However, insiders pointed out that although China allowed the RMB to us dollar exchange rate fluctuation range to be 0.5% above and below the middle price, it has rarely exceeded 0.3% in the past year.

"The fundamental reason is that the policymakers worry about floating over the general assembly to deteriorate the current export enterprises.