Offshore Renminbi (RMB) against the US dollar has risen by over 300 basis points during the day, approaching the 7.06 level.

On September 19th, the offshore RMB against the US dollar rose by more than 200 basis points during the day, approaching the 7.07 level; the onshore RMB against the US dollar rose by more than 150 basis points, once breaking through the 7.07 level.

This is positive news, but it's important to note that a rapid appreciation of the RMB is not necessarily good news, as it can put pressure on international trade.

On one hand, RMB appreciation is beneficial in reducing the cost of imported goods in China, which is advantageous for Chinese import companies and consumers.

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On the other hand, RMB appreciation may have a certain adverse impact on Chinese export companies, weakening their price competitiveness in the international market.

Exports, as one of the main drivers of China's economy at present, if affected, would be detrimental to the recovery of the Chinese economy.

How to balance the impact of RMB appreciation is something that needs to be carefully considered in the decision-making process.

The RMB exchange rate is mainly influenced by two factors: the trend of the US dollar and the domestic economic trend.

Last night, the Federal Reserve announced a policy of interest rate cuts, which will reduce interest rates by 50 basis points.

Affected by this news, the US dollar index weakened.

As of now, the US dollar index is reported at 100.62 points, and the weakening of the US dollar index has to some extent boosted the RMB exchange rate.

It is worth noting that the appreciation brought about by the decline in the US dollar index is a passive appreciation, and the initiative is not in our hands.

If the RMB exchange rate wants to maintain stability in the medium and long term, in addition to the need for the Federal Reserve to continue to cut interest rates in the future, the domestic economic fundamentals also need to remain stable continuously, which will attract the market.

I will say this sentence three times because too many people are asking.

The domestic economic fundamentals also need to remain stable continuously, which will attract the market.

The domestic economic fundamentals also need to remain stable continuously, which will attract the market.

The domestic economic fundamentals also need to remain stable continuously, which will attract the market.

In the long run, the RMB exchange rate has a certain degree of independence.

Although the interest rate cut by the Federal Reserve has a certain impact, the leading factor is still the domestic economic fundamentals.

The Federal Reserve has given us a helping hand, but it still depends on whether China's economy can recover as soon as possible, using economic growth to drive the appreciation of the RMB exchange rate.

So, when you expect the RMB to appreciate, you should actually first expect our economic vitality to rise.

The Federal Reserve has raised interest rates 11 times from March 2022 to July 2023, with a cumulative increase of 525 basis points.

This time, it has reduced by 50 points at one time, which is quite a lot.

However, the money flowing back at present is probably mainly buying bonds rather than A-shares.

We need to wait for A-shares to gain some momentum before they can attract more and more capital attention.

The exchange rate will remain stable around 7.3.

In the short term, it will not break through 6.5.

The trend has not yet started, so expectations can be adjusted.

The exchange rate will be stable around 7.2 in the medium and long term.