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Original title: The central bank reduced the foreign exchange risk reserve ratio again after three years
Our reporter Liu Qi
In order to keep the basic stability of the RMB exchange rate at a reasonable and balanced level, as of October 12, the central bank will reduce the foreign exchange risk reserve ratio for forward currency sales from 20% to 0.
For the main reason the central bank lowered the foreign exchange risk reserve ratio for forward currency sales from 20% to 0 this time, Yuan Dongyang, general manager of the Asset Management Investment Research Department of the Federal Reserve said in an interview with a Securities Daily reporter that, in general, When the expectation of RMB depreciation is strong, increase the foreign exchange reserve ratio; When the expectation of RMB appreciation is strong, reduce the foreign exchange risk reserve ratio. The reduction of the foreign exchange risk reserve ratio to zero this time is mainly to hedge the pressure of the rapid appreciation of the RMB since May. By reducing the foreign exchange risk reserve ratio, the cost of the bank’s forward currency sales business on behalf of clients is reduced.
Following the “811” exchange rate reform in 2015, in order to curb excessive volatility in the foreign exchange market, the central bank incorporated the bank’s forward foreign exchange business within the framework of macroprudential policy and raised foreign exchange risk reserves from financial institutions that sell forward foreign exchange on behalf of clients. The rate is set at 20%.
In recent years, the foreign exchange risk reserve ratio has also been adjusted many times. In September 2017, the central bank quickly adjusted the countercyclical macroprudential management measures introduced in the initial stage to curb pro-cyclical fluctuations in the foreign exchange market, and adjusted the foreign exchange risk reserve ratio to 0. In August 2018, it was seen affected by factors such as trade frictions and changes in the international exchange market. , The currency market showed signs of pro-cyclical fluctuations. In order to prevent macro-financial risks, promote the stable functioning of financial institutions, and strengthen macroprudential management, the central bank adjusted the foreign exchange risk reserve ratio for forward currency sales from 0 to 20%.
Wang Youxin, a researcher at the Bank of China Research Institute, told the “Securities Daily” reporter that one of the main reasons for the downward adjustment at this time was the gradual stabilization of supply and demand in the foreign exchange market. , the continuous net inflow of cross-border capital and the reduction of the risk of capital outflow. During the year, banks ran an overall surplus in foreign exchange settlement and sales on behalf of clients. Banks also maintained a surplus on foreign-related income and payments on behalf of clients for five consecutive months. The situation of the international balance of payments has improved significantly. The need to continue imposing forward exchange rate risk reserves to curb the need to purchase foreign currency Sexual decline.
According to data published by the State Administration of Foreign Exchange, in March of this year, foreign-related bank income on behalf of clients was $ 345.8 billion, payments abroad were $ 393.5 billion, and income and payments related to abroad had a deficit of 47.7 billion dollars. From April to August, foreign-related revenues and payments from banks on behalf of clients were all surplus, with surpluses of US $ 4.9 billion, US $ 5.7 billion, US $ 21.4 billion million, US $ 2 billion and US $ 12.7 billion. From January to August of this year, the accumulated income of banking agents related to abroad was US $ 2.6797 million, the accumulated external payments were US $ 2.6555 million and the accumulated income and payments related to abroad had a surplus of US $ 24.2 billion.
What impact will reducing the foreign exchange risk reserve ratio have for the forward currency sales business from 20% to 0? Wang Youxin believes that in the short term, the zeroing of the foreign exchange risk reserve ratio will reduce corporate finance costs and stimulate demand for foreign exchange purchases to some extent. In addition, it is more about releasing the central bank’s control signal, that is, it does not expect the exchange rate to continue to appreciate unilaterally, so as not to restrict the already fragile real economy and export sectors. Therefore, in the short term, it will help to rationally guide market expectations and achieve balanced fluctuations in the RMB exchange rate. In the long term, it reflects the current dynamic changes in the attractiveness of renminbi assets and foreign currency assets, and related policy tools have gradually returned to neutrality, boosting market confidence in China’s economy and assets. in renminbi, and also increasing the space for policy manipulation.
“In the short term, adjusting the foreign exchange risk reserve will help stabilize foreign exchange market expectations, and as continued unilateral appreciation is expected to cool, the RMB exchange rate is likely to decline. Indeed, in September 2015 and September 2017 After the three adjustments in August 2018, the risk of unilateral fluctuations in the RMB exchange rate has been greatly reduced. ” Yuan Dongyang said that in the long term, as an assessment of the fundamentals of an economy, the exchange rate is mainly determined by economic growth and monetary policy. Fundamental variables such as rigidity and foreign trade conditions, foreign exchange risk reserves are effective in changing expectations, restricting cross-border speculation and breaking the trend of exchange rates that are self-reinforcing, but cannot affect the factors previous fundamentals. Therefore, adjust the reserve ratio for currency risk. It is difficult to change the long-term trend of RMB appreciation.
