RMB Spot Rate Against the Dollar Posts Highest Close in More Than Four Years

The RMB spot rate against the US dollar closed at a more than four-year high in daytime trading.

On October 9 the RMB spot rate against the dollar closed at 6.6921 at 16:30, up 93 basis points from the previous trading day - the highest close since June 29, 2022.

As of press time, the offshore RMB rate against the dollar, which better reflects international investors' expectations, rose as high as 6.69265 during intraday trading on October 9, and has appreciated more than 4% cumulatively this year.

As an important price in financial markets, the RMB exchange rate has long drawn close attention from all sectors, and discussion has increased recently. On October 8 the People's Bank of China (PBOC) set out its policy stance on the RMB exchange rate.

The PBOC pointed out that China operates a managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies, and insists on letting the market play a decisive role in exchange rate formation. Over the past two decades or more the RMB exchange rate has floated in both directions; since 2010 it has been through multiple appreciation and depreciation cycles, with a more pronounced two-way floating feature and greater flexibility. China's trade development stems from rising industrial international competitiveness; China has no need and no intention to gain a trade competitive advantage through currency depreciation, and has never engaged in competitive devaluation. The exchange rate is affected by many factors including economic growth, monetary policy, financial markets, geopolitics and sudden risk events, and bears no simple linear relationship with the current account. International assessment methods for equilibrium exchange rate levels remain immature; using individual assessment conclusions as an "official basis" for RMB undervaluation is a distortion and misuse of the assessment results. Global economic imbalances are closely tied to the evolution of the global division of labor, the inherent contradictions of the international monetary system, and the long-standing high fiscal deficits and high consumption of some countries, and require all parties to work together to resolve. Simply attributing a country's declining industrial competitiveness, weakened fiscal and financial constraints and complex structural problems to other countries' exchange rates amounts to shirking and evading one's own adjustment responsibilities. China has contributed positively to multiple rounds of dynamic global economic rebalancing; during the 15th Five-Year Plan period it will keep advancing the transformation of its economic growth model, expand domestic demand, improve the business environment and deepen high-level opening-up, so as to promote a global economy that is more open, inclusive and balanced.