The stability of RMB exchange rate is of great significance. As far as the domestic economy is concerned, the stability of the exchange rate can ensure that the domestic monetary policy remains "master" and will not be impacted by the Fed's expectation of raising interest rates and the strengthening of the US dollar, which is really commendable. If the RMB enters a "passive" state, the space for independent adjustment of domestic monetary policy will be limited, so that it is impossible to flexibly stimulate the economy, and cross-cycle regulation and counter-cycle regulation will be limited.
Is RMB depreciation beneficial to exports or imports?
Conducive to exports.
If the RMB depreciates, it will be cheaper for people from other countries to buy goods in China, which is convenient for us to export goods. And this has a great impact on our imports, because RMB is worthless, so if we want to buy more products from other countries, we must use more RMB.
Imports will decline, and the profits of companies that mainly rely on imports will also decline: for imported goods, banks have to exchange RMB for foreign exchange such as US dollars before they can buy them from abroad. When the currency depreciates, the convertibility of the same currency with the US dollar will decrease, thus reducing the consumption of goods, thus increasing the price of imported products and reducing the competitiveness of imported products. Export growth, profit growth of export-oriented companies: With the decline of RMB exchange rate, the company can get more cash from the export goods in the bank, thus improving the company's profits.