UBS: China's Central Bank Is Expected To Not Allow A Significant Appreciation Of The Renminbi

Global foreign exchange on April 11 hearing, UBS (UBS) securities China chief economist Wang Tao on Monday (April 11) latest report pointed out that by the end of 2016 RMB 6.80 predictive maintenance, still expects Chinese policymakers will use foreign exchange reserves exchange rate is steady, years of RMB against USD is expected to depreciate temperately.
The bank said that in the past few months, the RMB devaluation pressure eased markedly. Not only the RMB exchange rate against the dollar has stabilized and rebounded slightly in March, the foreign exchange reserves in a row after a few months has shrunk to an increase of 10 billion 300 million dollars.The bank said that in the past few months, the RMB devaluation pressure eased markedly. Not only the RMB exchange rate against the dollar has stabilized and rebounded slightly in March, the foreign exchange reserves in a row after a few months has shrunk to an increase of 10 billion 300 million dollars.
The bank pointed out that the end of this year, the RMB against the U.S. dollar exchange rate forecast facing upward risk. In the short term, the weakness of the dollar, the improvement of market confidence, economic indicators to pick up and so should contribute to the support of the RMB exchange rate. Since February, China's central bank (PBOC) camera to guide the devaluation of the renminbi against a basket of currencies, against the dollar a slight appreciation.
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If the dollar continues to weaken this year, the depreciation of the RMB against the U.S. dollar may be lower than previously expected.But the bank believes that the central bank Chinese and will not allow the renminbi appreciation against the dollar significantly. With the improvement in the U. s.economy, rebound in inflation, the Federal Reserve on the market reserve policy tendency and interest adjustment of expectations may again change, which may promote a stronger dollar, then the RMB exchange rate depreciation and capital outflow pressure is likely to pick up again.
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Therefore, the bank said that to maintain the end of 2016 USD/CNY6.80 prediction but this prediction face some upside risk, also known as the renminbi against the dollar devaluation rate may be less than expected. In the case, the end of this year USD / CNY may at about 6.6 6.7.Global foreign exchange market center, 14:57 Beijing time, the dollar / yuan at 6.4742/43