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CFETS RMB exchange rate indices first release

recently, the China foreign exchange trading center announced its calculation for the first time on November 30, 2015 CFETS RMB exchange rate index was 102.93, 2.93% appreciation of the end of 2014, is foreign exchange trading center of the reference Bank for International Settlements (BIS) basket of currencies, special drawing right (SDR) currency basket arrived. Meanwhile, by the end of November, BIS basket index, appreciation of the SDR currency basket index from the end of 2014, respectively 3.5% and 1.56%.

"China foreign exchange Trade Center CFETS RMB exchange rate index published on a regular basis, will help lead the market changed focus on bilateral exchange rates of the Yuan against the dollar in the past habits, increasingly effective exchange rate calculated with reference to a basket of currencies as the main frame of the RMB exchange rate level, is conducive to maintaining the RMB exchange rate basically stable at a reasonable and balanced level. "China network commentator said.

"this is the first published by the official exchange rate index and weight can be thought of as directly and clearly identified for past policies. "The China Merchants Bank, said Liu Dongliang, financial senior analyst, which is a kind of real effective exchange rate of RMB, which launched market an important window for China's exchange rate policy, marking the RMB exchange rate will significantly advance the process of marketization.

effective exchange rate against a basket of currencies on relative stability index is a weighted average rates, mainly used for computing a weighted average of the country's currency against a basket of foreign currencies exchange rate changes, to more fully reflect the value of a currency changes. Experts pointed out that compared with the reference of the single currency with reference to a basket of currencies, better reflect the overall competitiveness of a country's goods and services, can also play the role of exchange rate regulation of imports and exports, investment and the balance of payments. CFETS RMB exchange rate index published for market observation provides a measurement of the RMB exchange rate in order to more fully and accurately reflect the market situation changed.

"scrapped hard peg to the dollar and moved to the dollar peg to a basket of currencies, in order to achieve in terms of a basket of currencies relative stability in the exchange rate. "Morgan Stanley huaxin Securities Research Chief Economist Zhang Jun told the newspaper said this means the Yuan in order to maintain and the relative stability of the dollar, rise against currencies other than the dollar remains. But because the two economic cycles, the interest rate cycle is out of sync, exchange rate policy and there is no need to synchronize, which is unsustainable.

for a long time, MarketWatch angle of RMB exchange rate is mainly look at the bilateral exchange rates of the Yuan against the dollar. China network commentator said, due to exchange rate fluctuations to regulate various trading partners on trade and investment, thus only observe the Yuan/dollar bilateral exchange rate does not fully reflect the international terms of trade. In other words, the RMB exchange rate should be not only the dollar as a reference, but also with reference to a basket of currencies.

 

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