This is a reference.
The depreciation of domestic RMB is due to inflation (or rising domestic prices). Because the same amount of money can't buy the same amount of goods after the price rises, the currency depreciates. The reason why RMB appreciates relative to other countries' currencies is that in the process of international trade settlement, the exchange rate between currencies is determined by the transaction price of international trade/import and export goods. Therefore, China's products in international trade, because the domestic price rises, so foreign countries need to use more foreign exchange to buy export products, or the exchange rate of foreign exchange RMB drops, and the RMB appreciates relative to foreign exchange.
Excessive appreciation of RMB is harmful;
1) For China, inflation makes prices rise and people's purchasing power decline;
2) In international trade, the price of China's export products has increased, the competitiveness of products in terms of performance and price has declined, and the international competitiveness of export products has declined.
The appreciation of RMB in the foreign exchange market reflects the recent strong economic growth, higher deposit interest rate and higher consumption index in China. Although there are some reasons for inflation, these are all factors that lead to the appreciation of RMB.
The appreciation of RMB will lead to export contraction, but it is beneficial to import trade. For example, if an exporter exports a book, it can fetch $65,438+000. In 2006, this 100 USD can be converted into 82 1.44 RMB according to the bill price, and in 2008, it can only be converted into 765438+. The net income decreased by 100 yuan, but the cost did not decrease. Under the current fierce export competition, many exporters have become unprofitable, while imports are the opposite.
The rise of exchange rate will slow down economic growth, reduce inflation, transfer the goods originally exported to foreign countries to the domestic market, increase the competition of domestic goods, and thus control or reduce prices.
The first purpose of raising interest rates is to tighten monetary policy and reduce the amount of loans, that is, to reduce the money input in the capital market, and raising interest rates will lead to an increase in the RMB exchange rate.
In 2007, the state raised the bank deposit reserve several times, with the aim of reducing the amount of money that banks put in the capital market without raising interest rates.
The state reduces or even cancels the export tax rebate for many commodities in order to reduce exports and inflation.
Judging from this year's trend, prices will continue to rise for some time because of the release of inflationary pressure.
generally speaking
The increase of deposit interest rate will make the exchange rate rise, while inflation will reflect the increase of consumption and GDP, which will also lead to the increase of exchange rate, while the increase of exchange rate will slow down economic growth, which will lead to the increase of unemployment, the decrease of income, the decrease of consumption, the fierce competition of domestic commodities and the decrease of inflation. In the end, it will lead to a lower exchange rate, thus achieving a new economic balance.