The rapid appreciation of the yuan is unsustainable and is also not in line with the national and international economic and financial situation, a Chinese researcher and former central bank official said yesterday.
The current rapid appreciation of the Chinese yuan against the US dollar may have exceeded, Sheng Songcheng, professor of economics and finance at the China Europe International Business School and former director of the Bank’s statistics department, told Xinhua. People of China.
The US dollar index has fallen 2.2% in the past month and a half, while the euro has strengthened against the greenback by 2.3% and the Japanese yen has weakened by 0 , 4%, but the yuan appreciated 2.9%, said Sheng.
The US dollar index is less likely to fall further, and the exchange rate of the yuan against the US dollar is also expected to be relatively stable under market rules. But the yuan’s exchange rate recently hit record highs, rising above 6.4 per dollar, indicating a market overshoot, he said.
Sheng predicts that the rapid appreciation of the yuan is not sustainable, as the US economy is expected to rebound in the second half of the year and the US dollar may strengthen as a result, while the narrowing interest differential between China and the United States could weaken the momentum. influx of hot money.
Meanwhile, the strengthened yuan cannot compensate for price increases in bulk commodities, and it cannot be used as a tool, he said, noting that the yuan’s exchange rate overshoot does not. is that of short-term speculation.