The Chinese yuan skyrocketed over 700 points against the US dollar in response, and the central bank shouted "take action when it's time"
After the financial regulatory authorities shouted "take action when necessary, and resolutely correct unilateral and pro cyclical behavior," the RMB/USD exchange rate rose in response.
The People's Bank of China announced on the afternoon of September 11, 2023 that a special meeting on the self-discipline mechanism of the national foreign exchange market discussed the recent situation of the foreign exchange market and the issue of the RMB exchange rate. The meeting emphasized that the financial regulatory authorities have the ability, confidence, and conditions to maintain the basic stability of the RMB exchange rate. They should take action when necessary, resolutely rectify unilateral and pro cyclical behavior, resolutely dispose of behavior that disrupts market order, and resolutely prevent the risk of exchange rate overshoot.
The exchange rate of the Chinese yuan against the US dollar has risen in both onshore and offshore markets.
The offshore RMB against the US dollar exchange rate broke through the 7.36, 7.35, 7.34, 7.33, 7.32, 7.31, and 7.30 levels consecutively on September 11th, with an intraday appreciation of over 700 points and the highest intraday rise reaching 7.2935.
The spot exchange rate of the Chinese yuan against the US dollar also rose by over 700 points at one point, breaking through the levels of 7.34, 7.33, 7.32, 7.31, 7.30, 7.29, 7.28, and 7.27 in a row, reaching a peak of 7.2608 during trading.
On September 8th, the exchange rate of the Chinese yuan against the US dollar fell below the 7.35 and 7.36 levels respectively in onshore and offshore markets, both falling below the low points of November last year.
"Although the Chinese yuan has depreciated against the US dollar recently, it has remained relatively stable against a basket of currencies and relatively strong against non US major currencies. The foreign exchange market is operating steadily, and market expectations are generally stable. With the implementation of domestic policies to stabilize the economy and stabilize expectations, the year-on-year growth rate of prices has bottomed out and turned positive, and import and export data is better than expected. The effect of real estate policies is gradually showing, consumption is clearly recovering, technological innovation is continuously breaking through, high-quality economic development is continuously advancing, and the potential for economic 'progress' is accumulating. The Chinese yuan exchange rate has a solid foundation to maintain basic stability at a reasonable and balanced level." The meeting pointed out.
The meeting also pointed out that the foreign exchange market self-discipline mechanism should continue to guide enterprises and financial institutions to establish a "risk neutral" concept under the guidance of financial management departments, and strengthen the supervision and self-discipline management of the behavior of members of the self-discipline mechanism. Foreign exchange market members should consciously maintain market stability, orderly carry out market making and self operated trading, and resolutely eliminate behaviors that disrupt the order of the foreign exchange market, such as speculation and customer incitement. Enterprises and residents should adhere to "risk neutrality", not blindly follow the trend, not gamble unilaterally, not gamble on certain positions, and maintain property safety.
