First, raise interest rates and the dollar will strengthen.
People are willing to exchange more dollars and then deposit them in American banks to get more income. In China, it is reflected in a large amount of selling RMB and a large amount of demand for USD, which leads to RMB depreciation and USD appreciation. If China forcibly stabilizes the exchange rate, there will be an outflow of assets, because selling RMB will increase domestic liquidity and force prices to rise to some extent. In the past, 1 yuan was sold to 2 yuan. With the exchange rate unchanged, people are more willing to exchange RMB for dollars to buy very affordable ones. Of course, China controls the outflow of assets, so the United States can still control the outflow of assets on the basis of raising interest rates and keeping China's exchange rate relatively stable. China only needs to adjust the liquidity of RMB to prevent excess liquidity. In the process of RMB internationalization, a stable currency value is needed to stabilize investors, so the currency value of RMB will not fluctuate, which has little impact on China's foreign trade import and export.
Second, cut interest rates and weaken the dollar.
In order to stimulate economic development and relax credit in the United States, few people are willing to put their money in the bank and invest in consumption instead. At this time, relatively speaking, there will be a large amount of international hot money in China. The demand for RMB is strong, and the pressure of RMB appreciation is increasing. In order to stabilize the exchange rate, the government issued a large amount of RMB through foreign exchange, which is equivalent to a loose monetary policy in disguise and is helpful to the economic development of China. But at the same time, it may lead to overheating, excessive leverage and rapid expansion of asset finance bubbles. Of course, China holds $ 3. 1 trillion bonds, which may be accompanied by the weakening of the dollar, resulting in passive losses.
Although the US dollar has great influence as the world settlement currency, China needs an independent monetary policy to escort China's economic development, and it will fall into the pit sooner or later if it is led by the nose.