The People's Bank of China said that since the beginning of this year, the RMB exchange rate has fluctuated in two directions based on market supply and demand, with enhanced flexibility, stable market expectations, orderly cross-border capital flows, stable operation of the foreign exchange market and a balance between market supply and demand. Therefore, the People's Bank of China decided to reduce the foreign exchange risk reserve ratio of forward foreign exchange sales business from 20% to 0. In the next step, we will continue to maintain the flexibility of RMB exchange rate, stabilize market expectations, and maintain the basic stability of RMB exchange rate at a reasonable and balanced level.
Forward sale of foreign exchange is a derivative product of exchange rate hedging provided by banks to enterprises. Enterprises can avoid future exchange rate risks to some extent by purchasing foreign exchange in the future. However, because enterprises do not purchase foreign exchange immediately, banks need to purchase foreign exchange in the spot market accordingly, which will affect the spot exchange rate and then affect the long-term purchase behavior of enterprises. This procyclical behavior can easily evolve into "herding effect".
What is the foreign exchange risk reserve ratio? This tool, which is regarded as an "automatic stabilizer" in the foreign exchange market by people in the industry, is essentially a price means, that is, adjusting the forward purchase of foreign exchange by influencing the forward price of the exchange rate. Generally speaking, when the expectation of RMB depreciation is strong, the foreign exchange risk reserve ratio will be raised; When the expectation of RMB appreciation is strong, the foreign exchange risk reserve ratio will be lowered.
"The foreign exchange risk reserve ratio is a countercyclical adjustment tool. Through adjustment, it can prevent the RMB from excessively appreciating or depreciating, and realize the two-way fluctuation of the RMB against the US dollar at a reasonable and balanced level. " Wen Bin, chief researcher of China Minsheng Bank, said that since the beginning of this year, the exchange rate of RMB against the US dollar has fluctuated greatly, showing a general trend from depreciation to appreciation. Especially with the continuous improvement of China's economic fundamentals, the RMB has appreciated sharply recently. At this time, lowering the foreign exchange risk reserve ratio to 0 will help the RMB exchange rate against the US dollar to maintain a reasonable and balanced level, on the other hand, it will also help banks to reduce the cost of selling foreign exchange in the future and increase the demand of enterprises for this product, so as to better manage exchange rate risks by using derivatives.
Xie, chief macro analyst of China Merchants Securities, believes that lowering the risk reserve ratio of forward foreign exchange sales business is to reduce the constraints on forward foreign exchange behavior, or to increase the demand in the foreign exchange market. "This is obviously a decision made by the central bank according to the current foreign exchange market situation, that is, in the case of a rapid rise in the RMB exchange rate, the restrictions on forward purchase of foreign exchange are relaxed, with the aim of letting the foreign exchange market determine the RMB exchange rate."
For example, when the original reserve ratio is 20%, it is assumed that a bank needs to set aside a foreign exchange risk reserve of $200,000 for the forward sale of foreign exchange of $6,543,800+0.00, and this fund will be deposited in the People's Bank of China for one year with zero interest. In this case, the bank will transfer the lost interest to the cost of selling foreign exchange in the future, which will eventually be borne by the customers who sign the forward contract with the bank, and the enthusiasm of customers for buying foreign exchange in the future will be reduced. When the reserve ratio drops to zero, enterprises with actual trade needs will be able to purchase foreign exchange at a lower cost.
In fact, this is not the first adjustment of the foreign exchange risk reserve ratio. From 2065438 to September 2007, the central bank timely adjusted the counter-cyclical macro-prudential management measures introduced in the previous period to curb the pro-cyclical fluctuations in the foreign exchange market and adjust the foreign exchange risk reserve ratio to 0; 20 18 foreign exchange market is affected by trade frictions, changes in the international exchange market and other factors, and there are some signs of pro-cyclical fluctuations. In order to strengthen macro-prudential management, the central bank decided to adjust the foreign exchange risk reserve ratio of forward sale of foreign exchange from 0 to 20% from August 6, 20 18.
Guan Tao, global chief economist of Bank of China Securities, said that from August 20 18 to August this year, the balance of unexpired forward foreign exchange sales by banks decreased by 1 137 billion US dollars, while the unexpired forward foreign exchange settlement increased by 163 billion US dollars. Since August last year, the balance of unexpired forward settlement and sale of foreign exchange on behalf of customers by banks has changed from net purchase of foreign exchange to net purchase of foreign exchange. If the foreign exchange risk reserve ratio is reduced to zero again, it will help to release the demand for long-term foreign exchange purchase and further promote the balance between foreign exchange supply and demand.