Chinese Yuan hit 17-year high.

December 26, 2011 the central bank today raised the central parity of RMB against the U.S. dollar 0.07%, to 6.3167 yuan against the dollar, the yuan-dollar exchange rate hit 17-year intraday high. At 6:00 p.m. on December 26th, Voice of the economic focus: Why did you suddenly against the dollar soared to the highest point in 17 years? This year, the RMB exchange rate floating is not within the normal range? Next year, the depreciation of the RMB against the U.S. dollar likelihood?
Beijing on December 26, according to Voice of the economy "CNR Financial Review" reported that the central bank today raised the central parity of RMB against the U.S. dollar 0.07% to 6.3167 yuan against one U.S. dollar. Last week of 2011, the RMB against the U.S. dollar hit a 17-year high, once again a hot topic. Looking back on 2011, the RMB against the U.S. dollar exchange rate, the overall maintenance of appreciation. From January 4 to 1 U.S. dollar against 6.6215 yuan, to November 4 for the year high of $ 1 for 6.3165 yuan. During Crack 6.6,6.5,6.4,6.35 other important juncture. But in September, the RMB between domestic and foreign markets show different trends, although the yuan central parity, opening days, but Hong Kong and overseas offshore renminbi non-deliverable forward market there across the board devaluation. The spread between the exchange rate also led to the recent wave of economic arbitrage on the market voice commentators, China Research Institute Professor Tan Yaling foreign investment have made the comment.
Choose the yuan central parity prices for the market
Moderator: near the end of the year, today against the dollar hit a 17-year high, the industry talking about. Why suddenly against the dollar soared to the highest point in 17 years? The idea that this is mainly to achieve tolerable inflation, the purpose of preventing the outflow of international capital. How do you see?
AERONAUTICAL: First of all should be more clear to see, not the central bank raised interest rates. Because from July 21, 2005, after our exchange rate reform, in fact, play a central bank is calculated and offer management functions, the real price level entirely by market makers to decide. So from this point of view, then, the yuan's central parity level is still rising today's market participants to make a choice, it is relatively technical content of this situation should it arise as a result, psychological and technical factors, there is now a renminbi appreciation and the appreciation of their own expectations and did not give up, RMB appreciation and status of this trend there. The third point is should be noted that foreign investment in China, the market maker system in which a certain proportion and a certain share, and forward of the NBF is still higher than on the mainland in the price of the price. So the combination of these factors, the yuan to rise, in fact, to some extent the natural repair market inertia to leave China and hedge funds made a strategy and technology choices.
Experts say not to prevent the outflow of international capital
Moderator: But now a lot of point of view, do one of the main purpose is to tolerate inflation, while preventing the outflow of international capital, you agree with this analysis?
AERONAUTICAL: I do not agree with this analysis, if the advent of inflation or inflation pressure when the traditional textbook or a traditional model tells us that we must solve the currency appreciation, but in fact we are not docked state of currency appreciation to solve the problem of inflation. Because we are now the basis of factors like inflation era of the past, with the kind of goods to solve the appreciation of the environment is completely different, because we are now the basis of the inflation factor should be even greater in the investment factors driven by speculation, So if the solution to currency appreciation, may further aggravate the atmosphere of speculation and speculative state, demand factors to determine if it is, then use the currency appreciation may be symptomatic. So I think we are in a very special era, it is not a traditional environment and theoretical docking, while the theory to guide the state can not change the reality of this environment, so we need more thought and wisdom of the observation, find to deal with change.
Moderator: do as you say the exchange rate level is determined by many factors. In fact, from today's point of view changes in the RMB exchange rate is a lot of people feel the ups and downs of a state, do you think the floating exchange rate this year is not in the normal range it?
AERONAUTICAL: First, if the international financial markets or the basic law of the basic characteristics of the professional point of view, it is a little less normal, because we have seven years of exchange rate reform process, the appreciation of the yuan is completely dominated this trend, almost no devaluation .
Moderator: general maintenance of appreciation.
AERONAUTICAL: Yes, only in 2009 we made a correction, the correction for a year, tangled in the 6.82 yuan and 6.83 yuan, the appreciation of the yuan this year, still did not stop, even in September to now there have been down this disk or limit , including the Hong Kong market, then a situation, but the domestic market as a whole, does not change the state of appreciation of the renminbi, RMB appreciation is not expected to digest, so from this point of view, then, the yuan's status should be with all the international currency market, the state should is different. From the law point of view, then, any exchange rate movements should be a curve, but we had a unilateral RMB to go straight, there should be a great problem.
Hot money flows to be vigilant for the normal drilling market loopholes
Moderator: Another recently emerged as the spot exchange rate of more than 10 consecutive trading days of the limit, the market began to Daxing a statement, this statement is the collective withdrawal of hot money in China, there are comments that the inflow of hot money in our country made enough to go out now and then, but then also the appreciation of the yuan, in fact, the intangibles of hot money and make a fortune, that is the outflow of international capital, then you can explain to us under this international capital flows of hot money in the end what to?
AERONAUTICAL: If a capital inflow or outflow of the market it is a normal phenomenon, because the capital itself is fame and fortune, whether it is normal for this investment or speculative hedge, he is completely profit-driven point of view of profit angle of the order, but it is the pursuit of profit may have a different way, then there may be more normal, and is more rational, more equitable, and some may be extreme, and to some extent, non- rational. So from this point of view, then, when we look at the hot money, look at the hedge, they must think he is not seen you in this country or the region's financial markets and investment appeal, contrary to some extent, in the 1997 Asian financial [2.66 -4.32%] in times of crisis, we have the basic positioning of hot money and hedge against the problems of speculation, it shows you the market or your region, there should be a lot of problems can give a great deal of hot money speculation and hedging of space and conditions, in fact, we now state and RMB appreciation expectations of RMB appreciation, it's not the normal use of that hot money hedge and arbitrage of the Chinese market in a significant way.
Moderator: That hot money itself, but also have to shell drill drilling a capital market.
AERONAUTICAL: Yes, including public opinion is not normal is actually related to the momentum of hot money has a relationship, because to create an atmosphere that create a public opinion, and then to guide or even to some extent misleading the market, in order to achieve the purpose of his fame and fortune .
Moderator: You mentioned a word, that is, in fact, the expected appreciation of the renminbi has not changed, this mean that the trend of the yuan next year will still show a trend of appreciation?
AERONAUTICAL: I think earlier this year in September as the renminbi market has now been some subtle changes, coupled with the end of our lower limit of this situation occurs, the future of our normalization and rationalization of the RMB should be very good , and the yuan next year may take a bilateral movements, will take the curve, there is on the up and down under, this situation for a rate for an economy, it should be more favorable, and relatively to its regularity and the risk is good. Read in Chinaese : http://finance.ifeng.com/forex/rmb/20111227/5346234.shtml

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