The US dollar exchange rate can reach 7 in 2022.

The RMB exchange rate in 2022 may be between 6.65 and 7. As of December 31, 2021, the U.S. dollar index has rebounded back to 95.97. Since the "811" exchange reform in 2015, when the U.S. dollar index is at this position, the U.S. dollar-RMB exchange rate has been in the range of 6.65 to 7. If the balance of payments support weakens in the future, the USD/CNY exchange rate may move towards this range.

It serves as a balancer for the "tightness gap" between China and the United States' monetary policies. In order to release domestic monetary policy space, it may allow the RMB exchange rate to release greater flexibility in the direction of depreciation. Federal funds futures currently imply expectations that the Federal Reserve will raise interest rates three times in 2022.

It is estimated that my country will have room for 1-1.5 percentage points of RRR cuts in 2022 and 10-15bp of room for interest rate cuts under increasing economic pressure. As a result, the interest rate gap between China and the United States will move towards the warning level of 80bp. , putting depreciation pressure on the RMB exchange rate.

Between the depreciation of the RMB and the “I-centered” monetary policy, the policy choice is already clear from the meaning of the central bank’s increase in the foreign exchange deposit reserve ratio in December 2021. The recent interest rate cut yesterday further illustrates the above point.