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china news service, september 25: the offshore rmb recovered the 7 mark against the us dollar on the 25th, the first time since may last year.

due to the federal reserve’s interest rate cut and the release of a series of major policies, the rmb exchange rate against the us dollar continued to strengthen.

on the 25th, the offshore rmb exchange rate against the us dollar, reflecting the expectations of international investors, rose above the 7 mark and returned to the 6 range after 16 months. as of press time, it was 6.9975, up 134 basis points on the day.

in terms of onshore rmb, on the 24th, the rmb spot exchange rate against the us dollar broke through the 7.06, 7.05 and 7.04 levels during the session, rising to a high of 7.0318 during the session, and closed at 7.0385 at 16:30, up 202 basis points from the previous trading day, also setting a 16-month high.

why did the rmb rise sharply?jones lang lasallepang ming, chief economist of greater china, previously said that after the fed cut interest rates, with the beginning of the fed's interest rate cut pace and the rising expectations of multiple interest rate cuts, it is expected that developed economies will follow the united states in starting a monetary policy adjustment cycle, the strong dollar trend is expected to be reversed, the interest rate gap between china and the united states is expected to narrow, and the renminbi will have more potential to remain basically stable at a reasonable equilibrium level.

chen li, chief economist of sichuan securities, believes that the start of this round of interest rate cuts by the federal reserve will lead to a decline in u.s. treasury yields, which will be accompanied by a reduction in the attractiveness of u.s. dollar assets. as a result, there is a high probability that the u.s. dollar will weaken in the medium and long term, which will be conducive to the strengthening of the rmb exchange rate.

on the 24th, at a press conference held by the state council information office on financial support for high-quality economic development, pan gongsheng, governor of the people's bank of china, announced a reduction in the deposit reserve ratio and policy interest rate, which would drive down the market benchmark interest rate. the interest rate on existing mortgage loans would be reduced, and the minimum down payment ratio for mortgage loans would be unified. new monetary policy tools would be created to support the stable development of the stock market.

pan gongsheng said that the monetary policies of major economies have been adjusted recently, and the pressure of rmb depreciation has been significantly relieved, and it has turned to appreciation. from a macro perspective, the exchange rate is fundamentally determined by economic fundamentals. the policy combination introduced by the central bank this time to accurately and effectively support the real economy will further consolidate and enhance the trend of my country's economic stabilization and improvement. from a micro perspective, the supply and demand of the foreign exchange market has become more balanced recently.

pan gongsheng also pointed out that the people's bank of china's position on exchange rate policy is clear and transparent. first, we must uphold the decisive role of the market in exchange rate formation and maintain exchange rate flexibility. second, we must strengthen expectation guidance, prevent the foreign exchange market from forming unilateral consistent expectations and self-fulfilling expectations, guard against the risk of exchange rate overshooting, and maintain the basic stability of the rmb exchange rate at a reasonable equilibrium level. (china news service app)