Central bank: the counter cyclical factor of RMB quoted price for the middle price of the dollar has returned to neutral

Feb 24, 2018 12:00:00 AM

recently issued a report by the people's Bank of China that the "counter cyclical factor" in the renminbi's intermediate price quotation to the US dollar is now neutral. In the next stage, we will increase the market to decide the exchange rate, enhance the two-way floating elasticity of RMB exchange rate, and keep the RMB exchange rate basically stable at a reasonable and balanced level.

central bank 2017 fourth quarter monetary policy implementation report pointed out that in May 2017, the foreign exchange market self-regulation mechanism introduced the "counter cyclical factor" in the central parity of RMB to us dollar exchange rate mechanism, in order to guard against the possible herd effect. Since the second half of 2017, the RMB exchange rate is expected to be divided, and the cross-border capital flows and the supply and demand of the foreign exchange market tend to balance. In January 2018, based on their own judgment of the economic fundamentals and market conditions, the quoted banks have adjusted the "inverse cycle coefficient" in succession.

reports that the current cross-border capital flows and foreign exchange supply and demand are more and more balanced. In the market environment has shifted to a neutral situation, it is necessary to make early suppression of the foreign exchange market procyclicality and the introduction of countercyclical macro Prudential Management Measures also return to neutral, strengthen the foreign exchange market price discovery function, improve market liquidity, to better serve the real economy.

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