On May 28, the central parity rate of RMB traded at 6.3858 yuan to 1 dollar, up 172 basis points from the previous trading day，hitting a three-year high and entered the era of 6.3 yuan . Also, the exchange rate of the onshore RMB to the US dollar and the offshore RMB to the US dollar has been in the era of 6.3 yuan, and the offshore RMB to the US dollar exchange rate once broke through the 6.37 yuan mark.。
The yuan’s rise has coincided with a rise in global commodity prices due to a range of factors, putting pressure on China, the world’s most important importer of raw materials, to import inflation。Due to the rising prices of steel, copper, aluminum , enterprises’ production costs are also rising sharply. They are faced with the problem of raising prices at the consumer end, or even having to stop taking orders under the pressure of cost upside down.At present, global prices of major commodities have been significantly higher than before the epidemic, and domestic import prices have been rising significantly. Since June 2020, the US spot composite index has risen by 32.3% rapidly, while the domestic South China composite index has risen by 29.3% in the same period. Copper, aluminum, stainless steel, crude oil, chemical materials, iron ore and coal have risen in price.
But the appreciation of RMB to exporters under great pressure. Tan Yaling, president of the China Forex Investment Research Institute, did not agree with the idea of using exchange rate movements as a hedge against imported inflation from rising commodity prices, when interviewed by the Global Times. She said exports have played a key role in China’s economic recovery since the COVID-19 outbreak. But since last year, exporters have faced a combination of a stronger RMB, higher shipping costs and higher prices for raw materials, squeezing profits.
The future trend of the RMB is highly valued by all parties. The Wall Street Journal said the exchange rate is likely to remain between 6.4 and 6.5 yuan to the dollar in the future, with further appreciation likely to prompt stronger action from the People’s Bank of China, according to BNP Paribas Capital’s Asia Pacific head.
Post time: May-28-2021