RMB Exchange Rate Reinnovation High Spreads Spreads Spreads Arbitrage Driven Hot Money Pressure

After a slight correction in the first two months, China's financial institutions added 376 billion 940 million yuan to foreign exchange in August, a rise of 70% over the 219 billion 564 million yuan increase in July.

Data released by the central bank on the 21 day show that the hot money is driven by the double arbitrage income of spreads and spreads.

Some experts pointed out that in the context of RMB internationalization and further acceleration of capital account liberalization,

As an important indicator of foreign exchange inflow, as of the end of 8, China

Market expectations for the continued appreciation of the renminbi are one of the drivers behind foreign exchange inflows.

In September 21st, the RMB exchange rate in the interbank foreign exchange market was 1 yuan to 6.3772 yuan.

The yuan rose 108 basis points against the US dollar, not only lifting the 6.38 barrier again, but also creating a new high since the reform.

By the 21 day, by the middle price, the appreciation of RMB against the US dollar has exceeded 3.7% this year.

Jiang Shu, senior foreign exchange and gold analyst at 13.19,0.35,2.73%'s capital operations center, recently said that the appreciation of the renminbi will be between 4% and 5% this year. Once the Federal Reserve has launched QE3, the annual appreciation of the yuan will be 7% to 8%.

In addition to the appreciation of the renminbi, China's "high interest rate" is also attracting.

As a speculative capital, the hot money abroad is mainly in the form of US dollars and other foreign currencies. With the promotion of RMB internationalization and the accumulation of more and more offshore renminbi in Hongkong, a new hot money, which exists in the form of RMB, has begun to appear.

Such a pfer can earn tens of millions of dollars in cross border speculation between the mainland and Hongkong.

How large is the hot money of this RMB form? At present, the way to accumulate Renminbi in Hongkong market is mainly through cross border trade RMB settlement.

According to the central bank data, as at the end of 7, the total amount of RMB settlement business under the current cross border trade was 1 trillion and 630 billion yuan.

According to the estimation of professional institutions, 80% to 90% of the trillion settlement accounts for the settlement of imports of goods, and 10% to 20% for export settlement.

"The import and export of Renminbi is much higher than that of the export receiving Renminbi. This unilateral settlement means that most of the RMB flows out of the country through this way, and the strong appreciation of the renminbi is expected to strengthen the willingness of overseas holders to hold Renminbi."

Zhao Qingming, an international financial expert, told the economic reference daily.

This part of the renminbi is not on the Hongkong market, but the interest rate of RMB deposits in the offshore RMB market in Hongkong is relatively low. The yield of RMB bonds and other investment products is not high, and this part of hot money is also permeating the mainland through various channels.

Recently, the Ministry of Commerce issued a notice on the issue of cross border RMB direct investment (Draft), which means that after a small pilot, the regulatory framework for cross-border RMB direct investment (RMB FDI) was formally promulgated.

Following the RMB's investment in the domestic inter-bank bond market and the R-QFII (RMB qualified foreign investors) mechanism, an overseas RMB reflux channel will be added.

"The capital account liberalization under the local currency will increase the arbitrage opportunity of the hot money in the form of RMB. In addition, the hot money in the form of foreign currency before entering the country needs a remittance cost, and the hot money of the RMB form has a larger set of interest because there is no such exchange cost."

Insiders pointed out.