Guan Tao, chief economist at Huafu Securities, said on Oct. 9 that since the RMB
hit a trough vs the dollar in mid-April last year it has strengthened to about
6.70 per USD, a cumulative appreciation of roughly 10% from the low. He
attributed the move to firm exports, trade-surplus-driven FX supply and stronger
market confidence as the economy shifts toward higher-quality growth. The yuan
has been appreciated in both bilateral and effective terms: BIS nominal and real
Effective exchange rates rose 4.7% and 7.4% from May last year to Aug this year.
China’s export price index averaged 105.32 in the first eight months of the
year, implying average YoY export price gains above 5%, which increases the
price contribution to export growth and further confirms that recent trade gains
reflect improved industrial international competitiveness.
