Double benefits, the RMB exchange rate short-term rise. According to
Wind data, as of 18:58 on December 30, the exchange rate of the onshore RMB against the US dollar was 6.9035 yuan, an increase of 674 basis points from the previous closing price , and the intraday highest was 6.9000 yuan. The exchange rate of offshore yuan against the US dollar was 6.9216 yuan, up 514 basis points from the previous closing price, and the intraday highest was 6.9185 yuan.
Image source: Wind
CFETS RMB exchange rate index
Currency basket weights will be adjusted
China Foreign Exchange Trade System (hereinafter referred to as "trading center") issued an announcement on adjusting the weights of CFETS RMB exchange rate index and SDR currency basket RMB exchange rate index on December 30 .
announced that in order to further enhance the representativeness of the RMB exchange rate index currency basket, the CFETS plans to adjust the currency basket weights of the CFETS RMB exchange rate index and the SDR currency basket RMB exchange rate index in accordance with the "CFETS RMB Exchange Rate Index Currency Basket Adjustment Rules". The new version of the index will take effect on January 1, 2023.
According to reports, the weight of the currency basket of the CFETS RMB exchange rate index is calculated using the trade weight method that considers entrepot trade and factors. The current version of the index uses trade data for 2020. In order to further enhance the representativeness of the index, the new version of the index uses the 2021 trade data as the weight for adjustment. After historical retrospective calculations, the new version and the current version of the CFETS RMB exchange rate index basically coincide with each other.
Image source: China Foreign Exchange Trading Center
"In the new version of the CFETS currency basket, the weights of major currencies such as the US dollar, the euro, the Japanese yen, and the British pound have all been lowered, and the weights of currencies in most emerging economies have been increased accordingly." Cinda Securities Chief Macro analyst Xie Yunliang said.
In addition, International Monetary Fund (IMF) adjusted the weight of the SDR currency basket in August 2022, and the CFETS adjusted the currency basket weight of the SDR currency basket RMB exchange rate index accordingly.
Image source: China Foreign Exchange Trading Center
Trading hours extended to 3:00 the next day Beijing time
Interbank RMB foreign exchange market trading hours extended again.
The People’s Bank of China and the State Administration of Foreign Exchange announced on December 30 that starting from January 3, 2023, the trading hours of the interbank RMB foreign exchange market will be extended to 3:00 the next day Beijing time, and the central parity rate of the RMB exchange rate and the floating range The application period of market management systems such as market maker quotation will be extended accordingly.
The central parity of the RMB exchange rate at 9:15 Beijing time and the spot closing price of RMB against the US dollar at 16:30 Beijing time announced by the China Foreign Exchange Trading Center remain unchanged.
Image source: People’s Bank of China website
According to the People’s Bank of China and the State Administration of Foreign Exchange, this will help expand the depth and breadth of the domestic foreign exchange market, promote the coordinated development of onshore and offshore foreign exchange markets, provide more convenience for global investors, and further Enhance the attractiveness of RMB assets.
The People's Bank of China and the State Administration of Foreign Exchange stated that they will continue to promote high-level opening up to the outside world, further deepen the construction of the foreign exchange market, and strive to build an open and diversified foreign exchange market with sound functions and orderly competition, so as to better serve the high-quality development of the real economy.
Insiders said that 's move will cover more overseas trading hours, avoid excessive price differences in domestic and foreign foreign exchange markets, and make it more convenient for global investors to participate.
Editor: Zheng Yashuo
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