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Index pegged to a basket of currencies, the exchange rate of RMB reforms stirred global currency markets

ahead of the Fed rate hike, China's new exchange rate moves, currency or "decoupled" dollars, and to the main reference and to maintain the stability of a basket of currencies.

the evening of December 11, China foreign exchange Trade Center first released CFETS RMB exchange rate index.  The index includes listed on the China foreign exchange trading center of 13 foreign exchange currency, sample currency weights calculated by considering factors of the re-export trade trade-weighted method is made.

"the new RMB exchange rate index will help to guide 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.  "The people's Bank of China posted an editorial on the day.  

since the 2005 exchange rate reform, China's exchange rate regime has claimed with reference to a basket of currencies, but in the past few years, the Renminbi actually maintained a relatively synchronous to the dollar. "This in fact suggest that the Yuan is a major change, which gradually against the dollar.  "Bank of America Merrill Lynch's global foreign exchange manager David Woo told the 21st century business Herald told the FT in an interview.  

the insiders, a move that will change the market for a long time observed the RMB exchange rate, "peg" perspective, become an important indicator of market exchange rate policies, RMB exchange rate liberalization process will be considerably advanced.

as the Fed raised interest rates draws near and the dollar appreciated significantly over the past few months, in order to maintain the relative stability of the Yuan, China's Central Bank has considerable efforts on the open market.  In the past six weeks, the Yuan has fallen, according to the Thomson Reuters data back in December 2005, this is the longest consecutive weekly decline.

"the announced reform initiatives on the devaluation of the Renminbi might have reduced the outside world doubts and pressures before the Fed rate hike was announced the policy of ' time '.  "David Woo said.

on December 14, the exchange initiatives introduced in first trading day, China's Central Bank to continue to cut the Yuan central parity, Yuan rate against the dollar at 6.4495, lowered the 137 basis points, the sixth consecutive day down. Offshore continued to plunge, as of press time, the offshore Yuan fell against the dollar to 6.5554.

 

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