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People's Daily Online>>Opinion

Chance of RMB devaluation small (2)

By You Zhixin (People's Daily)

08:23, December 16, 2011

"The RMB against the U.S. dollar was mostly opening lower in early trading, pulling up to the limit, and closing higher in the spot market in this period," Wan Chao, investment manager of Ping An Asset Management Company, told the reporter.

Bank foreign exchange dealers said there were many technical reasons for the continuous "limit" of the RMB including unstable market confidence, the needs of exchange rate correction, advanced repayment of foreign currency loans by enterprises, "hot money" reflux and so on. Especially in the context of a stronger U.S. dollar, global currencies are devaluation in general, and it is normal change for RMB periodically devaluation.

According to analysts, the narrowing gap between parity exchange rate and the spot market — the RMB against the U.S. dollar — would end the ongoing trend of devaluing to the lower limit and there is little chance of violent RMB devaluation. Analysts expect the RMB appreciation will continue into the first half of 2012 and then enter into the wide two-way fluctuations.

【1】 【2】

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