Ministry of Commerce: China has no intention of using currency devaluation to promote exports
On November 10, the Ministry of Commerce held a regular new hearing press conference. Ministry of Commerce spokesperson Shen Danyang said that maintaining the basic stability of the RMB exchange rate will be conducive to promoting the development of foreign trade. The Chinese government has no intention of promoting exports through currency devaluation.
The total import and export value in October fell slightly year-on-year
According to customs statistics, from January to October this year, the country’s imports and exports were 19.56 trillion yuan, a year-on-year decrease of 1.9%, of which exports were 11.22 trillion yuan, a decrease of 2.0%; imports were 8.33 trillion yuan, down 1.8%. In October, the total import and export value was 2.05 trillion yuan, down 0.6%.
In addition, since August this year, the exchange rate of the RMB against the US dollar has been declining. Some media asked that the effect of China’s exchange rate depreciation on promoting foreign trade is gradually weakening. What is the Ministry of Commerce’s comment on this?
In this regard, Shen Danyang pointed out that the appreciation or depreciation of the exchange rate is not a decisive factor in exports, and it is not necessarily the case within the scope. The RMB exchange rate is also not the main factor affecting China’s foreign trade. In recent years, with the deepening of market-oriented exchange rate reform, the two-way fluctuations in the RMB exchange rate have further expanded, and the market has further played its role in the exchange rate formation mechanism.
“We have always emphasized that exchange rate changes are a double-edged sword for foreign trade progress. Against the background of weak economic recovery and increasingly complex monetary policy environment, maintaining the basic stability of the RMB exchange rate will be conducive to promoting foreign trade. progress. In other words, the Chinese government has no intention of promoting exports through currency devaluation.” Shen Danyang said.
“The real effective exchange rate of the RMB remains stable”
On November 10, the central parity rate of RMB against the US dollar depreciated by 53 basis points to 6.7885, a new low in more than six years. At the same time, the onshore RMB closed at 6.7925 against the US dollar, a sharp drop of 206 basis points from the previous trading day, approaching the 6.8 mark.
In this regard, Shen Danyang said that in recent times, affected by expectations of interest rate hikes by the Federal Reserve, the RMB has depreciated against the US dollar in the short term, but two overall situations must be seen. First, the changes in the bilateral exchange rate of the RMB against the US dollar are consistent with the changes in the direction of other major currencies against the US dollar; second, the RMB against a basket of currencies and the real effective exchange rate has remained basically stable.
Shen Danyang cited a set of data: On October 31, the China Foreign Exchange Trading Center’s RMB index against a basket of currencies was 94.22, which was basically the same as 94.72 on August 5. New data from the Bank for International Settlements also showed that the real effective exchange rate of the RMB in September was 121.24, basically the same as 121.74 in July.
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