On July 7th, Guan Tao, the global chief economist of Bank of China Securities, said that the RMB exchange rate is supported in the medium and long term. In the short term, the stabilization of China’s economy in the second half of the year is the key.
“A few days ago, the National Standing Committee pointed out that in response to changes in the economic situation, more effective measures must be taken to enhance development momentum, optimize the economic structure, and promote the continued economic recovery. The economic stabilization and recovery will play an effective role in supporting the RMB exchange rate.
At the same time, Guan Tao pointed out that it is necessary to prevent “linear unilateral thinking” in the foreign exchange market. The increase in exchange rate flexibility will help release market pressure in a timely manner and avoid the accumulation of exchange rate expectations.
Since the previous RMB exchange rate pricing has fully reflected various negative factors, if there is a marginal improvement in the future economic recovery, it will greatly boost market confidence. (by reference)