RMB Exchange

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China: Understanding RMB Exchange Rate Cycle

Jinyue Dong (BBVA Research) | From the regional peak if 7.167 in May 2020 till now around 6.477, RMB to USD eschange rate seems to have been entering into a one-way appreciation trend whit its accumulative appreciation for around 9.6%, gaining most of lost ground of the previous depreciation triggered by China-US trade war since 2018. Not only the RMB to USD spot rate, but also the RMB CFETS basket has displayed quite a similar pattern from 91.39 to around 96, accumulatively 5%. That means, CNY has not only outperformed USD, but also against a broader basket of currencies.