First of all, there are more signs that the export boom has dropped from high speed to medium speed. Since the second half of 2020, the continuous strength of RMB exchange rate has been attributed to the high export prosperity of China, which has supported the inflow of foreign exchange based on the actual demand of foreign trade.
Second, the downward pressure on China's economy has increased in stages, affecting the inflow of foreign capital. Since March, external shocks such as the global epidemic superimposed on the Russian-Ukrainian conflict and the rapid interest rate hike by the Federal Reserve may trigger signs of phased withdrawal of foreign capital.
Third, the US dollar index "breaking 100" is more involved in the formation of RMB exchange rate. After the outbreak of the Russian-Ukrainian conflict, the US dollar index began a new wave of rise, especially since April, with the help of the sharp depreciation of the yen, the US dollar index "broke 100". However, since the exchange rate reform of "8- 1 1" in 20 15, the US dollar index has not been running above 100 for a long time, and the impact of this "breaking 100" on RMB exchange rate expectations is worthy of attention.
Fourth, the exchange rate plays a more regulatory role in the differentiation of monetary policies between China and the United States. The divergence of monetary policies between China and the United States will continue. As we have always stressed before, China's monetary policy should also be "self-centered", and the key is to let the RMB exchange rate play more roles in regulating internal and external balance.