"Breaking 7" has important symbolic significance in the foreign exchange market, because it is usually regarded as an important bottom line of RMB exchange rate. RMB exchange rate exceeding 7 has an important impact on China's economy and global financial markets. There may be the following reasons for RMB exchange rate breaking 7:
1. Expected changes in the market: International investors' worries about the future economy and the trend of the international economic situation led them to withdraw their funds from the China market and transfer them to other safe-haven assets, such as USD. In this case, the decline of RMB exchange rate may accelerate.
2. US dollar exchange rate fluctuation: When the US dollar exchange rate fluctuates greatly, it suddenly rises after experiencing a sharp decline. In this case, the RMB exchange rate will inevitably be hit to a certain extent, which will lead to the depreciation of the RMB.
3. External environmental impact: Changes in the international trade environment, changes in monetary policies of major economies and other factors may also lead to a decline in the RMB exchange rate.
But in general, the RMB exchange rate breaking 7 is a cyclical fluctuation, which mainly refers to the fluctuation of the RMB exchange rate against the US dollar, and does not mean that the RMB has depreciated in the whole foreign exchange market. At the same time, China implements a managed floating exchange rate system, which is based on market supply and demand and adjusted with reference to a basket of currencies (such as those of bilateral trading partners and BRICS countries). Therefore, when the RMB exchange rate exceeds 7, the China government will take a series of countermeasures, including adjusting monetary policy and strengthening macro-control to ensure economic stability and exchange rate stability.