Since late April, the depreciation pressure of RMB against the US dollar has increased significantly. In terms of the central parity rate of RMB against the US dollar, it was reported to be 6.372 yuan on April 19, and then decreased continuously. It was reported to be 6.5628 yuan on April 28, with a decrease of more than 1900 basis points during the period. At the same time, the onshore and offshore RMB exchange rates against the US dollar have also fallen sharply, falling below the 6.6 yuan mark so far. There are many reasons for the recent devaluation of the RMB exchange rate, among which the most direct factor is the continuous release of "hawkish" signals by the Federal Reserve, which leads to the continuous strengthening of the expectation of further interest rate hikes. In this context, the US dollar index and US bond yield both rose, especially the US dollar index exceeded 100 for the first time since May 19, 2020. The strong performance of the US dollar index puts pressure on non US currencies, and the offshore RMB exchange rate is also under downward pressure. In the short term, the pressure of RMB devaluation may continue, but in the medium and long term, it is unlikely that the RMB exchange rate will continue to depreciate unilaterally. The reason is that China's economy and finance maintain good resilience and vitality, the long-term fundamentals will not change, and there is no basis for significant depreciation of the RMB exchange rate under the background of the expected continuation of the double surplus of the balance of payments. It is noteworthy that the fluctuation of foreign investment in domestic stocks and bonds has increased recently, but the fluctuation of RMB exchange rate will not "fade" RMB assets. It can be seen that the RMB exchange rate against the US dollar is still depreciating in the past two days, but the northbound funds regarded as "smart money" maintain a net inflow trend. According to wind data, on April 26 and April 27, the net purchases of northbound funds were 1.543 billion yuan and 4.359 billion yuan respectively; As of April 27, the cumulative net purchase was 1612.94 billion yuan, a slight increase from 1609.047 billion yuan on April 19. The safe also said recently that the short-term fluctuation of cross-border securities investment does not represent the overall pattern of foreign capital flow, let alone the long-term investment willingness of foreign capital. With the digestion and expected release of some short-term influencing factors in the market, overseas institutions' investment in China's securities will return to stability, and long-term value investment is still the main consideration. In fact, the attraction of RMB assets is increasing. According to the data previously released by the safe, from 2018 to 2021, the cumulative net increase of foreign capital's holdings of stocks and bonds in China exceeded US $700 billion, with an average annual growth rate of 34%. In addition, according to the data recently released by the International Monetary Fund (IMF), the proportion of RMB in global foreign exchange reserves rose to 2.79% in the fourth quarter of 2021, ranking fifth in the world and reaching the highest level in five years, indicating that RMB assets are recognized by more overseas sovereign investment institutions. The attraction of RMB assets mainly comes from three aspects: first, China's economic fundamentals are good and the potential for endogenous economic growth is huge, which provides strong support for the long-term improvement of RMB assets; Secondly, the correlation between RMB assets and asset prices and returns of developed and emerging economies is low. It is a better choice for international portfolio to diversify risks and has decentralized investment value; Thirdly, at present, foreign capital accounts for 3% to 5% in China's stock market and bond market. There is still great potential for global capital to further allocate Chinese assets. Based on this, it is reasonable to believe that the RMB exchange rate has the ability to maintain basic stability at a reasonable and balanced level, and the quality of RMB assets will be more sufficient. (Xinhua News Agency)