On February 23, the onshore RMB exchange rate against the US dollar rose by more than 100 points, breaking the 6.32 mark to 6.313, a new high since April 2018; The offshore RMB exchange rate against the US dollar, which more reflects the expectations of international investors, once rose above the 6.31 mark, setting a new high in recent four years. Both offshore and onshore RMB exchange rates hit new highs against the US dollar. Since this year, the RMB exchange rate has continued to fluctuate upward as a whole. On the first trading day of this year, the central parity rate of the RMB against the US dollar was reported at 6.3794. By February 24, the central parity rate of the RMB against the US dollar was reported at 6.3280, up more than 500 basis points. In fact, since June last year, the expectation of monetary tightening by the Federal Reserve has been continuously strengthened, and the RMB exchange rate has staged an independent market of strengthening against the trend against the background of the gradual rise of the US dollar index, which has not weakened with the appreciation of the US dollar, causing widespread concern in the market. Why will the RMB continue to strengthen? Zhou Maohua, a macro researcher in the financial market department of Everbright Bank, believes that it is mainly driven by domestic fundamentals and the prominent hedging attribute of RMB, "On the one hand, the strong financial data released by the central bank in January, coupled with the recent signs that the real estate market is picking up, the market is optimistic about the prospect of domestic economic recovery, and the expectation of the central bank's further policy easing in the short term is cooled; on the other hand, the Fed's accelerated tightening expectation and the warming of the international geopolitical situation have increased the uncertainty of the prospect of global economic recovery and intensified the volatility of the global market , risk aversion in the market pushed the RMB higher to some extent; At the same time, the dollar maintained a weak range of "volatile trend". Chang ran, senior macroeconomic researcher of Zhixin Investment Research Institute, said that the RMB has attracted the attention of European and American international investment institutions with its "low-risk" characteristics such as relatively low volatility and stable purchasing power. Recently, the price of global risky assets has fallen under the disturbance of geopolitics and the expectation of interest rate hike by the Federal Reserve, and the attraction of RMB assets has further emerged. Industry insiders believe that China's economy is resilient, the RMB is easier to win the favor of international capital, and the continuous inflow of international capital into RMB assets promotes the appreciation of the RMB. Will the strong trend of RMB continue? In the view of insiders, the RMB will remain strong in the short term, but in the medium term, with the acceleration of the monetary policy shift of the world's major developed economies, the differentiation of monetary policies between China and the United States will increase significantly, which may put the RMB under devaluation pressure. Societe Generale research macro team believes that in the short term, the process of repairing the overvalued RMB exchange rate is interrupted by risk aversion. Before the risk aversion has subsided, the "safe haven" attribute of RMB assets will support the continued strength of the exchange rate, and the RMB exchange rate against the US dollar is expected to hit the 6.30 mark. However, this will also lead to a further narrowing of the interest rate gap between China and the United States, which will increase the medium-term pressure on the RMB exchange rate. The latest research report of the Bank of China Research Institute believes that recently, the exchange rate market risk caused by cross-border capital flows deserves attention: first, the downward pressure on the exchange rate has increased. Since the second half of 2020, the trading fluctuation in the inter-bank foreign exchange market has increased, the foreign-related collection and payment of banks has continued to be in surplus, and the RMB exchange rate has remained high. However, due to the accelerated normalization of the Fed's monetary policy, the opposite direction of China US monetary policy and the continuous rise of the US dollar index, it is necessary to predict and deal with the possibility of a sudden reversal of the trend of the RMB exchange rate. The second is the impact of speculative hot money withdrawal. Last year, the risk of global inflation expectations rose. Some offshore hot money, for the purpose of speculation, increased the purchase of government bonds while increasing the value of RMB. Once the RMB exchange rate depreciated, these hot money would quickly escape the market, causing a double impact on the exchange rate market and interest rate market. "Therefore, we need to prevent the withdrawal of short-term hot money, pay attention to whether there is underground capital transfer, especially pay attention to the trend of gray capital outflow hidden in net error and legacy items, and severely crack down on illegal cross-border capital transfer such as underground banks." According to the Research Report of the Bank of China Research Institute. "In the next stage, the RMB exchange rate is still resilient, but it does not have the conditions for sustained appreciation." Chang ran believes that this year's RMB exchange rate trend will be "dominated by me". It is expected that the Fed's interest rate increase will have a relatively limited impact on the RMB exchange rate, the annual trend may be more balanced, and the RMB exchange rate will maintain two-way fluctuations with strong elasticity. (Xinhua News Agency)