As for whether the RMB will accelerate its appreciation in the future, Wang Chunying said that under the joint action of internal and external factors, the future RMB exchange rate is expected to continue to maintain two-way fluctuation and basic stability at a reasonable and balanced level.
Smart markets can always see the positive and negative sides of the coin. They not only fully recognize the basic support of the RMB exchange rate in the domestic economy, but also pay close attention to various external unstable and uncertain factors, which may keep the RMB up and down and fluctuate in both directions. Wang Chunying said that at present, there are three factors discussed by market institutions: first, in the long run, despite the weakening of the US dollar, the current global economic recovery prospects are not clear, and the short-term trend of the US dollar is uncertain.
Third, considering the pros and cons, the current international protectionism, unilateralism, geopolitical conflicts are frequent, which will increase the uncertainty of the international financial market. In fact, some indicators also reflect market views. For example, from the domestic risk reversal index which can reflect the exchange rate expectation, the average value since October was 0.97%, maintaining a positive value, far lower than the 3.03% at the beginning of 2016. In May 2018, the RMB was in the period of appreciation, which was 0.03%. At present, 0.97% is in the middle level in recent years, which also shows that the markets expectation of medium and long-term RMB exchange rate tends to be neutral.
Wang Chunying reminded that enterprises should actively prevent exchange rate risk and establish a risk neutral concept. Since this year, the average one-year implied volatility of domestic option market is 5%, and the fluctuation between the highest price and the lowest price is 7.5%. The RMB exchange rate flexibility is relatively strong. In the face of exchange rate fluctuations, enterprises should strengthen the awareness of risk prevention. First, we need to change the unilateral linear thinking that RMB is either up or down, and establish the awareness of two-way fluctuation of RMB exchange rate. Second, it is necessary to deal reasonably and prudently, do a good job in risk assessment, and appropriately hedge the exchange rate exposure. Third, we should try our best to control currency mismatch and arrange the currency structure of assets and liabilities reasonably. Fourth, we should not use exchange rate hedging tools as speculative arbitrage tools and take unnecessary risks. Review of extended reading: the index fell by 2.72%, and the insurance coverage was 2600. This week, a total of 4.54% of the national goddess old Ganma was recalled in Australia because of chicken bone in chicken oil and pepper! Tesla recalled some imported electric vehicles totaling 48600 vehicles. Source: editor in charge of Finance and Economics: Yang Bin_ NF4368
First, we need to change the unilateral linear thinking that RMB is either up or down, and establish the awareness of two-way fluctuation of RMB exchange rate.
Third, we should try our best to control currency mismatch and arrange the currency structure of assets and liabilities reasonably.