Zhang Jingwei: The Central Bank'S Interest Rate Cuts Will Not Trigger A Global Currency War.

The exchange rate of RMB against the US dollar has been rising in recent years.

But in the first quarter of this year, the situation was different.

After June, the RMB against the US dollar is still on the upward track.

The new economic normality under China's structural adjustment has also been confirmed by policy makers.

All the major institutions at home and abroad are particularly sensitive to the slight throbbing of China's monthly or quarterly economic growth.

Especially in Japan's continued quantitative easing policy and the implementation of quasi quantitative easing monetary policy in the euro area, China's monetary policy has attracted considerable attention.

From two rounds of targeted reduction of agriculture, rural areas and small and micro enterprises, as well as a slightly enlarged credit flow in the two or three quarter, the pace of "micro stimulation" is still maintained.

This year's monetary policy is not stimulated by China.

In the macro-economic downturn, the decision-making level is just letting the local government go to the administrative property market to relax the restriction on the purchase of the property market. The 9 / 30 new deal and the promotion of housing consumption are not the same mistakes of the property market stimulating the economy, but the release of wait and see and the repressed needs.

Under the rhythm of temperate monetary policy, the cut of interest rate cut is small, and the market effect is great.

Such a fierce market reaction is not the monetary policy itself, but the sudden release of market expectations under excessive repression.

In this situation, the RMB exchange rate will fluctuate with the trend.

The stronger dollar relative to the end of quantitative easing will be relatively weak even if China does not cut interest rates.

The second is the dilemma of European and Japanese deflation, and China's macro-economy under structural adjustment also has worries of deflation.

China's rate cut, though not as flagrantly devaluated as the yen under the guidance of "Andouble economics" and the weakening of the euro, remains the same. The policy logic is the same, and the market consequence of RMB brought down by interest rate is depreciation.

But this devaluation is a response to market sentiment rather than a permanent long line of weakness.

Under the "two-way fluctuation" of RMB and US dollar, the euro and yen have depreciated again and again, and the RMB can not bear the pressure from the two largest economies in Europe and Japan.

Statistics show that in the past six months, the yen and the euro have depreciated nearly 10% against the US dollar, while the relative value of the renminbi has depreciated by nearly 12%.

Since the end of 2012, the yuan has risen to nearly 1/3 against the yen. This month, the yuan has reached a record high against the yen, and the yuan has reached a new high of 10 years against the euro.

Out of the crisis, the United States may be temporarily exposed.

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The discharge of water.

Fortunately, China has accumulated nearly $4 trillion in foreign exchange reserves in the past. China is committed to promoting balance of payments in international trade.

Moreover, China's future trade emphasis will be enhanced while enhancing quality, that is, from focusing on goods trade to service trade pformation, and strengthening the construction of multi-faceted free trade (zone) to enhance "interconnection and mutual benefit" with trade partners and mutual benefit.

But for China in terms of structural adjustment, the appreciation of the renminbi against the yen and the euro is also unbearable.

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The aim is to adjust the imbalance in the internal market by adjusting the monetary policy, that is, by adjusting interest rates to stimulate domestic demand and promoting economic growth, rather than the depreciation of the RMB exchange rate, to boost exports.

Once the window of interest rate cuts is opened, the future will not exclude the "sudden" coming again.

In this regard, the global market should be well prepared, but this does not mean that China has joined the chorus of Japanese and European currency devaluation.

Of course, there will be no RMB joining the US dollar, Japanese yen and euro currency wars.

The most difficult times of crisis have come to an end, and the major currencies in the world have not yet had an uncontrollable currency war.

In the post crisis era, China's monetary policy with active reform and structural adjustment will remain relatively stable.

Judging from the effect of quantitative easing in Japan, it is not sustainable to rely on devaluation of the currency to stimulate the economy.