Zhou Hao, a senior economist in Asia at Commerzbank in Germany, believes that the RMB is likely to experience a managed devaluation in view of the slowdown in growth and trade uncertainty. It is expected that the RMB will experience a moderate devaluation in the next few years, with the dollar hitting 7.07 against the RMB at the end of 2019 and 7.23 at the end of 2020.
Zhou Hao also said at the bank's annual press conference on Tuesday that China is stepping up efforts to achieve a new balance between economic growth, financial stability and external challenges. In the future, China and the United States will give priority to trade issues and manufacturing industry to cope with new global trends. It is expected that China's economy will grow by 6.2% and 5.8% respectively in 2019 and 2020, and the growth challenges still exist.
"Now the market (trade with China and the United States) is full of questions again,... There are still quite a lot of problems between China and the United States that need to be solved, and there is a lot of uncertainty in them, so this is also a relatively important aspect of market concern. For China's economy, the trade agreement will have a greater impact on the economic outlook." He said.
As for the exchange rate of RMB, Zhou Hao pointed out that the Sino US trade war has a negative impact on the RMB, but the United States does not want the dollar to be too strong, so the impact of the trade war on the people's exchange rate and currency is not as big as we expected, and it will have a hedge effect on each other. From the perspective of policy, when China's trade dispute intensifies, China needs the exchange rate as a weapon to some extent, but also does not want the RMB There is too fast depreciation, because it may cause capital outflow, so RMB stability is still the main tone.
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