BEIJING, May 30 (Xinhua) – The rapid valuation of the RMB is unsustainable and is not in line with the national and international economic and financial situation, a senior Chinese researcher and former central bank official told Xinhua on Sunday.
Sheng Songcheng, a professor of economics and finance at China Europe International Business School and former director of the People’s Bank of China’s survey and statistics department, said the current rapid appreciation of the Chinese yuan against the US dollar may have -is overcome.
The US dollar index has fallen 2.2 percent in the last month and a half, while the euro has strengthened against the green dollar by 2.3 percent and the Japanese yen has weakened. 0.4 percent, but the RMB has appreciated 2.9 percent, Sheng said.
The US dollar index is less likely to decline further and the RMB exchange rate against the US dollar should also be relatively stable according to market rules. But recently, the RMB exchange rate has hit record highs and topped 6.4 to the green dollar, indicating an excess in the market, Sheng said.
Sheng predicts that the rapid appreciation of the RMB will not be sustainable, as the US economy is expected to recover in the second half of the year and the US dollar may strengthen accordingly, while the Reducing interest rates between China and the US may weaken the hot money influx.
Meanwhile, the strengthened RMB cannot offset rising commodity prices in bulk and cannot be used as a tool, said Sheng, who stressed that exceeding the RMB exchange rate is only short-term speculation. .
China encourages long-term capital investment, but should avoid a large inflow of capital in the short term, which will increase the RMB exchange rate, weaken the competitiveness of exporting companies and affect the independent implementation of the financial market. and China’s monetary policy, he said. Sheng.