When the local currency depreciates, domestic investors and foreign investors are unwilling to hold various financial assets denominated in local currency, and will convert them into foreign exchange, leading to capital outflow. On the other hand, when there is a trend of appreciation of local currency abroad, domestic investors and foreign investors try to hold various financial assets denominated in local currency, which will lead to capital inflows.

Extended data:

The Bank of China and many experts believe that the appreciation of RMB has basically reached its peak, and the RMB has reached the stage of bilateral fluctuation and stability. But the fact is that it is still appreciating. The US Treasury report also believes that the RMB is still obviously undervalued, and there is still a need for further appreciation of the RMB against the US dollar. There is a big gap between China and the United States in their understanding and views on the RMB exchange rate issue.

At the beginning of July, 2065438+03, the fifth round of China-US Strategic and Economic Dialogue will be held in the United States, and the RMB exchange rate issue may be mentioned again. China should "argue with reason" and never let the RMB appreciate indefinitely. We affirm that the United States has not listed China as a currency manipulator again. However, China should respond strongly to the threat of RMB appreciation.

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