In order to reach the lower limit of the comprehensive position of foreign exchange settlement and sale, banks will increase their demand for US dollars to ease the pressure brought by RMB appreciation. How to understand this sentence, In the early stage, the foreign exchange administration department adopted positive and negative interval management for the comprehensive position of foreign exchange settlement and sale of commercial banks, and the comprehensive position of foreign exchange settlement and sale of banks should be controlled between negative and positive numbers, such as-10/00000 USD to100000 USD. In this case, banks will generally control the comprehensive position of foreign exchange settlement and sale at around 0. In the context of the continuous appreciation of RMB, it is easier for commercial banks to control the comprehensive position of foreign exchange settlement and sale at a negative value.

Circular 20 of the State Administration of Foreign Exchange restricts the comprehensive position of foreign exchange settlement and sale held by commercial banks, and links the position with the loan-to-deposit ratio of foreign currency. As long as the bank's foreign currency loan-to-deposit ratio exceeds the upper limit of 75 stipulated by the State Administration of Foreign Exchange, the lower limit of the comprehensive position of foreign exchange settlement and sale held by commercial banks will be greater than 0. At present, the foreign currency loan-to-deposit ratio of all commercial banks is much higher than 100%, which means that banks need to increase their foreign currency positions before the end of June, which is equivalent to selling tens of billions of dollars less foreign currency to the market during this period, which can obviously alleviate the pressure of RMB appreciation.

At the same time, the bank's foreign currency financing will obviously exert some appreciation pressure on the RMB exchange rate. If commercial banks want to lower the lower limit of the comprehensive position of foreign exchange settlement and sale, thus reducing the exchange rate risk of holding foreign currency, then they need to lower the loan-to-deposit ratio of foreign currency. Only when foreign exchange deposits cannot be greatly increased, reducing foreign exchange loans will also appropriately alleviate the pressure of RMB appreciation.