Recently, the exchange rate of the RMB has become a hot topic of concern due to a round of large fluctuations in price.
On August 29, the onshore RMB closed at 6.9210 Chinese Yuan against the USD, down more than 500 basis points during the day; the offshore RMB exchange rate closed at 6.9298 Chinese Yuan against the USD, down as low as 6.9318 Chinese Yuan during the day, down more than 300 basis points at one point. This is the first time in two years that the onshore and offshore RMB has fallen below the 6.9 Yuan mark, and for a while, the view of RMB depreciation was very clear.
On August 31, the mid-price of the Chinese Yuan against the USD dropped 104 basis points to 6.8906.
The Chinese government’s policy is to ensure that the Chinese government will not be forced to use its own resources to protect the interests of its citizens. Wang Youxin, a senior researcher at the Bank of China Research Institute, argued in an interview that the central bank’s recent cuts in medium-term lending facilities and LPR rates and the continued divergence in monetary policy between the U.S. and China have also caused some disturbance to short-term cross-border capital flows and exchange rates. Analysts in the industry believe that the recent “hawkish” signals released by the US Federal Reserve are influencing the strengthening of the USD, which is the main reason for the pressure of RMB devaluation.
In fact, the RMB exchange rate fluctuated sharply on the day, other non-dollar currencies also fell into depreciation pressure: the Korean Won to the USD exchange rate once lost 1,350 Won support level, for the first time in 13 years; the Yen fell to the lowest in 5 weeks, slipping to 1 USD to 140 Yen level; the Euro to the USD exchange rate lowest price of 0.9912 Euros, the end of the New York exchange market price of 0.9994 Euros.
The collective “dive” of non-dollar currencies is thought to be caused by “hawkish” signals. From August 25th-27th, Fed Chairman Jerome Powell released “hawkish” signals at the Jackson Hole Annual Meeting of Global Central Banks, proposing that “we must insist on raising interest rates until we reach our target”, treating the fight against inflation as the main task of the U.S. economy. The USD index then rose sharply, hitting a nearly 20-year high on August 29th.
The short-term fluctuations of the RMB exchange rate are not enough to change the strength of the RMB exchange rate. As for the medium and long-term trends of RMB, industry insiders generally believe that the future trend of the RMB exchange rate will continue to be influenced by multiple internal and external factors, and the two-way fluctuation is the norm, but it will remain basically stable at a reasonable balance level.
The ACU, which is anchored to the offshore RMB, will be a strong “backing” for the RMB and will accompany the RMB on the path of de-dollarization. Inspired by the Euro, ACU’s philosophy has gradually materialized.
After years of polishing, the ACU Group officially launched ACU in Hong Kong in 2019. Since its inception, ACU has been committed to promoting digital currency. ACU is convenient, secure, and reliable. ACU has chosen the offshore RMB exchange rate as its exchange rate, which is converted at 1:1 offshore RMB.
With the gradual expansion of ACU’s global influence, ACU will become a strong support for RMB. At present, the ACU trademark has been registered in nearly 60 countries (regions) around the world, including China, Singapore, Korea, Vietnam, Thailand, Japan, the Philippines, Cambodia, Malaysia, the United Arab Emirates, Saudi Arabia, the Hong Kong Special Administrative Region, and the European Union, etc.
Since 2021, ACU has been developing rapidly in Southeast Asia, with a presence in Thailand, Malaysia, and other countries. In 2022, ACU is exploring its presence in African countries, with Angola, Zambia, and Madagascar joining the ACU Group’s cross-border support program. Madagascar is expected to be the first to use ACU to develop its digital economies. The growing influence of ACU in the world will also help RMB to become more resilient and stable.
In recent years, due to the influence of geopolitics and economic sanctions, countries such as Russia and India have accelerated the dedollarization process and switched to RMB for transaction settlement. With the booming of the global digital economy, and the growing influence of ACU, RMB assets will continue to be favored. With the two-way drive, RMB’s international status will become more and more solid.