"With the deepening of supply-side structural reform, China's economic fundamentals will further play a stable and fundamental role, the RMB exchange rate is expected to remain basically stable, and cross-border capital flows will develop in a balanced way, which will further stabilize the scale of foreign exchange reserves."
We don't comment on this statement. We prefer external environmental factors. The recent continuous decline of the US dollar index has eased the pressure of China's capital outflow, and at the same time, the world economy has recovered. This year, China's import and export trade is relatively optimistic, increasing its foreign exchange reserves.
Since the foreign exchange reserves have stabilized for a short time, how to maintain and increase the value of the currency is a problem worthy of consideration. Relatively speaking, the central bank will buy American bonds to solve this problem. Since the beginning of this year, foreign central banks have started to increase their holdings of American bonds, and Bank of China is the biggest buyer of American bonds this year. So what's the signal from China's massive purchase of US debt?
The pressure on foreign exchange has been reduced and the operation has been stable.
Not only did the Bank of China buy American debt in a big way, but other central banks also acted in succession. According to the latest data from the Federal Reserve, since the beginning of this year, the scale of US debt held by foreign central banks has increased by 6 1 billion US dollars to 2.92 trillion US dollars, the highest level since June 20 16. It seems that the days of buying American debt are coming again. At present, the yield of American debt is still more optimistic than that of Germany, Japan and Britain.
Most importantly, the US debt market is the largest bond market in the world with the highest liquidity. With the endorsement of the credit of the world superpower, it is a good choice for the central bank looking for a safe place to store its large amount of cash.
It is worth noting that in the first quarter, China increased its holdings of US debt by US$ 29 billion to US$ 65,438 +0.088 trillion. The reason for buying a large number of American bonds is inseparable from the entire internal economic environment. China's foreign exchange reserves and RMB exchange rate are relatively stable. Some time ago, China's selling American debt to ease the pressure of RMB exchange rate has basically decreased.
Moreover, from the external environment, the US dollar index has been declining recently. From the middle of 20 14 to the end of last year, capital began to flow out of emerging market countries gradually, which led to the depreciation of the local currency. It is a common practice to sell American debt to resist domestic foreign exchange pressure. However, since the beginning of this year, the continuous decline of the US dollar has temporarily stabilized the currencies of emerging market countries, thus reducing the demand for countries, especially China, to sell US debt!
Overall, China's massive purchase of US debt sent two signals:
First, China's foreign exchange rate is basically stable;
Second, the pressure of capital outflow in China has eased, which may not be good for China's import and export trade, but it can allow China to concentrate on building its internal economic market environment.
As we all know, China's real economy is facing an important stage of structural transformation and upgrading. The real economy needs help from all sides to improve the market vitality and promote the sustainable development of China's economy. In the increasingly complex international relations, only by doing a good job in our own economy can we be free from the passivity of the external environment!
At the same time, for the working people, creating a good economic market environment is conducive to our economic income. We hope that China can usher in a new round of economic growth as soon as possible!