In 2022, the cumulative depreciation of the RMB against the U.S. dollar spot exchange rate exceeded 9% for the whole year.
On the last trading day of 2022, the spot exchange rate of RMB against the US dollar closed at 6.9514 at 16:30 during the day, a drop of 5,784 basis points or 9.07% from 6.3730 at the end of last year; After the bureau announced the extension of trading hours in the interbank foreign exchange market, the spot exchange rate of RMB against the US dollar regained the 6.9 mark during the night session.
Looking back at the exchange rate trend of the RMB against the US dollar this year, it showed a rise first, then a depreciation and then a slight recovery, but the RMB remained basically stable against a basket of currencies.
Specifically, affected by Fed’s interest rate hike , etc., the RMB began to depreciate against the US dollar in stages in mid-April, and depreciated to around 6.8 in mid-May; after a period of volatility, The RMB exchange rate depreciated again in mid-August And fell below the "7" mark, and fell below the 7.3 mark at the end of October; however, affected by the weakening of the Fed's interest rate hike expectations and the optimization of domestic epidemic prevention and control, the RMB rebounded strongly against the US dollar in mid-November and regained the "7" mark in December .
Regarding the trend of the RMB against the US dollar in 2023, institutions tend to expect a slight appreciation.
CICC believes that the support of various domestic policies, the strength of the U.S. dollar, changes in cross-border payments, and the exchange rate related policies of the regulatory authorities may be the key factors affecting the trend of the U.S. dollar and RMB exchange rate in 2023. On the whole The agency believes that the US dollar may rebound in the first quarter of 2023, and the USD/RMB exchange rate may be affected by this and rise to around 7.05. However, after entering the second quarter, affected by factors such as China's economic recovery and the Fed's shift, the renminbi may return to the appreciation track. It is expected that the center of the US dollar-renminbi exchange rate in the fourth quarter of 2023 may be around 6.70.
The UBS strategy team believes that the U.S. dollar may strengthen in early 2023 and may fluctuate to a certain extent, which also means that the RMB exchange rate may weaken in early 2023 and may fluctuate to a certain extent. After that, although China's exports in 2023 may be significantly weaker than in 2022, given that the prices of commodities and may fall, and domestic commodity-intensive industries may still be relatively weak, the growth rate of imports in 2023 may also slow down. The agency expects the trade surplus to remain roughly stable in 2023. In addition, market sentiment is expected to drive RMB/USD appreciation in the second half of 2023, given that the Federal Reserve is expected to start cutting interest rates in the second half of 2023, and as the Chinese economy restarts and continues to recover. Taking into account market developments, the agency adjusted its USD/CNY forecast for the end of 2023 to 6.8 from 7.1 previously.
Huatai Securities predicts that the RMB exchange rate will appreciate moderately to 6.78 by the end of 2023 as growth continues to recover and the US dollar cycle moderately declines. Although it will take time for the real economy to recover, the revaluation of the RMB exchange rate and RMB asset prices may be "immediate", and the domestic interest rates may also "increase all boats".
China Merchants Securities Macro Zhang Jingjing's team believes that in terms of exchange rate policy, based on the "macro-prudential + micro-supervision" framework system, focusing on preventing the formation of unilateral expectations of exchange rate depreciation, speeding up the market-oriented reform of the exchange rate formation mechanism and promoting two-way fluctuations in the RMB exchange rate.
