On Sep 15th, the exchange rate of the US dollar against the RMB broke through the psychological mark of “7”, and then depreciation accelerated, breaking through 7.2 in less than two weeks.
On Sep 28th, the spot exchange rate of the RMB against the U.S. dollar fell below 7.18, 7.19, 7.20. 7.21, 7.22, 7.23, 7.24 and 7.25. The exchange rate was as low as 7.2672, which was the first time since Feb. 2008 that the exchange rate of the RMB against the US dollar fell below the 7.2 mark.
So far this year, the renminbi has depreciated by more than 13%. You know, the US dollar exchange rate was still around 6.7 in early August!
It is worth noting that this round of RMB depreciation is mainly related to the US dollar index, which is currently close to a 20-year high, and the hawkish remarks of the Federal Reserve are the main factors that disturb the US dollar index. The Fed has raised its federal funds rate by 300 basis points since March, one of the fastest pace of rate hikes on record.
The latest news said that while Fed official were bracing for another sharp rate hike in November, some officials expressed greater concern about a sharp rate hike to fight inflation. Some Fed officials have already begun to signal that they want to slow the pace of rate hikes as soon as possible and stop raising rates early next year.
Foreign trade people would pa attention to the signals released by the Fed’s policy meeting on November 1st - 2nd.
Post time: Nov-28-2022