One of the difficulties is that the central bank's interest rate policy is facing challenges. In the past few months, domestic CPI has continued to run at a high level. For example, the rising prices of raw materials such as grain and crude oil, as well as the rising labor costs, all require the central bank to continue to raise interest rates and change the embarrassing situation of negative interest rates. After all, "two defenses" have become the primary task of macro-control this year.
However, after the Federal Reserve cut interest rates, the spread between China and the United States has been upside down, limiting the room for the Bank of China to raise interest rates. Since the second half of last year, the Federal Reserve has cut interest rates four times in a row *** 175 basis points, and now it has reached 3.5%. After six interest rate hikes since last year, China's benchmark one-year deposit rate is 4. 14%, and the spread between China and the United States has been narrowing from 245 basis points at the beginning of last year, resulting in the current upside-down situation, and the room for the Bank of China to raise interest rates has been suppressed.
Moreover, the domestic stock market has recently fallen back to the level of August last year, the real estate price has been adjusted back, and the asset inflation situation has obviously eased. If the slowdown in the world economy leads to a slowdown in China's exports, this in itself can help China's economy make a soft landing. At this moment, the central bank slams on the brakes on the economy again, which is in danger of dragging down China's economy.
The second problem is the increasing pressure of RMB appreciation. In the two days after the Federal Reserve cut interest rates, the RMB exchange rate hit record highs. 65438+1On October 24th, the central parity rate of the US dollar against RMB was reported at 7.2293. On the one hand, the spread between China and the United States is further upside down, which will inevitably lead to the accelerated inflow of overseas arbitrage funds; On the other hand, from the perspective of global economic growth pattern, emerging market countries are still places where global funds are keen. Therefore, the relaxation of US monetary policy is bound to increase the pressure of RMB appreciation.
The exchange rate reform has adopted a gradual approach. Although the exchange rate flexibility has been increased, the appreciation trend of RMB still makes international hot money flow into China through various channels, which further aggravates the double surplus of international payments and eventually leads to the increase of foreign exchange reserves, which will inevitably put greater pressure on the macroeconomic operation at this stage.
The third problem is that the China government is facing more and more contradictory pressures in regulating the economy and preventing the massive loss of foreign exchange assets. In order to keep the RMB exchange rate stable, China Bank bought almost all the foreign exchange flowing into China, and then issued RMB bills to withdraw the corresponding liquidity. The interest rate cut by the Federal Reserve means that the interest rate paid by bills issued by the central bank in China to stabilize the currency is nearly 200 basis points higher than the interest rate obtained by purchasing US Treasury bonds.
The fourth problem is that the timing of overseas investment is facing a test. The upside-down spread between China and the United States intensifies the input of international hot money into China, thus exacerbating the domestic asset bubble, which requires further export of "excess". Faced with huge foreign exchange reserves, investing overseas is obviously a good way out. However, China's sovereign funds have taken several actions before, and their book returns are depressing after the global stock prices plummeted repeatedly. This has also triggered a new controversy. Is it too early for previous sovereign funds to attack overseas? At the same time, after the recent global asset revaluation and integration, a new problem has emerged. Is it the best time to invest overseas?
Some scholars say that if 2007 is a year of global inflation, then 2008 can be described as a year of stagflation, that is, the risks of economic stagnation and inflation coexist. At the Federal Reserve's monetary policy meeting at the end of this month, it is still widely expected that the Federal Reserve may cut interest rates by 50 basis points again, which will further aggravate many problems faced by China's economy. Do you want to catch up quickly or wait and see
In fact, it is commendable to act quickly when the storm is raging, but sometimes the strategy of "sitting tight" is often more effective. We might as well see how effective the Fed's measures to cut interest rates and stimulate the economy are, and then it's not too late to prescribe the right medicine for China.