Why did the US dollar fall against the yuan?

There are many theories of exchange rate determination, compared with the classic purchasing power parity theory when reached, that is, when there is no tariff and a series of transaction costs, the actual value of goods expressed in the currencies of various countries should be equal, and the real value of goods determines the changes in the exchange rates of various countries, among which the factors that affect the changes in a country's exchange rate are inflation, labor productivity, the intervention of the national monetary authorities, international capital flows, etc., but the impact is the exchange rate parity.

In fact, the country ** can control the exchange rate in a short period of time, provided that you have enough foreign exchange reserves, strong foreign exchange reserves are the fundamental force that dares to exchange the currency exchange rate, not determined by foreign countries not recognized, suppose, the People's Bank of China said that the yuan against the dollar is 6:1, the United States said no, the yuan is overvalued, it should be 1:8, so he will choose to throw out the yuan, buy dollars, but China ** has strong foreign exchange reserves, throw a large amount of dollars to him, buy the yuan, In this way, the renminbi, supported by foreign exchange reserves, may not be subservient to the will of the United States and depreciate.

On the other hand, when foreign countries buy and undervalue the renminbi, the People's Bank of China is the issuing organ of the renminbi, and how much they throw at them is only a matter of the speed of the machine.

As for why the exchange rate of the renminbi is used to criticize China, this problem is much more complicated, not a sentence or two sentences can be said clearly, the recent period of the dollar against the renminbi not only depreciated, but on the contrary, it has appreciated, there are reports that the United States forced China to agree to open a renminbi settlement point in the United States, to put it bluntly, it is to form a renminbi trading market in the United States that is not controlled by China, much like the United States in the 80s of the last century to make the Nikkei index to hit the Japanese financial market, if so, Then it can be understood that the criticism is that the drunkard does not mean to drink, but cares about the establishment of the RMB overseas trading market, let time verify.

Personal opinions, corrections are welcome.

There are pros and cons to the appreciation of the renminbi, and it is generally said that the disadvantages outweigh the advantages. For example, China will cause a decline in exports, an increase in unemployment, and inflation due to the influx of speculative funds. The United States** certainly wants the dollar to depreciate, which will benefit the United States.

It shows that our country is improving, a good thing1

Inflation will simply lead to our domestic prices**, but it's good to want to study abroad!

The purchasing power of the renminbi has increased.

The appreciation of the renminbi against the U.S. dollar means that the purchasing power of the renminbi has increased, for example, now the renminbi is exchanged for 1 U.S. dollar, and after the appreciation, the renminbi can be exchanged for more U.S. dollars. in the international market.

It turns out that the goods that can be bought for one yuan have appreciated in the renminbi.

In the future, it can be purchased for less than one yuan, and the appreciation or depreciation of the RMB can be more intuitively reflected through the exchange rate.

Further Information] The impact of the renminbi rising against the US dollar:

1.Positive impact.

First, to expand domestic consumer demand for imported products so that they can obtain more benefits from the base year. The most obvious change that the renminbi's appreciation has brought to domestic consumers is that the renminbi in their hands is "more valuable". If you study or travel abroad, you'll spend less money than before; Or, with the same amount of money, you'll be able to do more than before.

Second, reduce the cost burden of imported energy and raw materials. China is a resource-poor country. With the development of international energy and raw materials, domestic enterprises are bound to bear an increasingly heavy cost burden.

In 2004, compared to 2003, refined oil products, steel, copper and iron ore were imported.

The average of **respectively**4%, more than doubled.

2.Negative effects.

First, it will affect China's exporters, especially labor-intensive ones.

In the international market, the export of Chinese products, especially labor-intensive products**, is much lower than that of similar products in other countries. The reasons are as follows: first of all, China's labor force is low; Secondly, due to the fierce domestic competition, export enterprises are willing to spend all their money to adopt a low-price sales strategy.

Once the RMB appreciates, in order to maintain the same RMB **bottom line, China's export products expressed in foreign currencies **will**, which will weaken its **competitiveness; Keeping the foreign exchange of export products unchanged will inevitably squeeze the profit margins of export enterprises, which will inevitably affect export enterprises, especially labor-intensive enterprises.

Second, it is not conducive to the introduction of foreign direct investment in China. China is the world's foreign direct investment.

The most countries. At present, foreign-funded enterprises are playing an increasingly obvious role in China's industry, agriculture, service industry, and other fields, and have had a major impact on promoting technological progress, increasing employment, and expanding exports, thus promoting the entire national economy.

development. Although the appreciation of the renminbi will not have a substantial impact on foreign investors who are already investing in China, it will have an adverse impact on foreign investors who come to invest in China, as it will increase their investment costs. In this situation, they may shift their investment to other developing Chinese countries.

This is a bad thing, because if it continues, it will have some impact on our lives. It's not a good thing for yourself.

I think this should be a good thing, because in this way, we will become richer in the renminbi, and in this way, our profits will become more valuable, and our country's development will be accelerated.

It can only be a good thing, don't talk about Japan, the new generation of Japan in the 90s suffered from the disease of wealth, and happy education harmed Japan.

The RMB is used every day in our daily life, and it is related to all aspects of life, so most people are more concerned about this topic, so what does the depreciation of the RMB against the US dollar mean? What does that mean? Jun has prepared relevant content for your reference.

The depreciation of the renminbi against the US dollar indicates that the renminbi has become worthless, that is, the exchange rate of the renminbi against the US dollar.

lower, but the renminbi depreciated.

It will also be beneficial, it will be good for exports, and some export enterprises will be more profitable, and their profits will increase.

But the corporate profits of importing companies will fall, because when importing American things, they have to exchange the yuan for dollars, but if the yuan depreciates, then it will lead to an increase in import costs.

For example: a pack of spicy noodles from abroad.

Originally, it was only RMB 1 yuan a pack, but after the depreciation of the RMB, it became worthless, so it needed RMB 2 yuan a pack, which became higher, but the thing is still that thing, which will lead to an increase in import costs and a decrease in the competitiveness of imported goods, which is not very friendly to import enterprises.

But these are temporary, the state will generally adjust, for us ordinary people, there is no need to worry too much, because the impact is not big, basically in the country is not engaged in foreign trade work personnel, it is difficult to feel, because every day to work, after work, in fact, there are still relatively few people who pay attention, are busy with their own work.

Advantage. The depreciation of the renminbi against the U.S. dollar shows that the renminbi has become worthless, that is to say, the exchange rate of the renminbi against the U.S. dollar is lower, but the depreciation of the renminbi will also be beneficial, will be good for exports, and some export enterprises will be more profitable, and their profits will increase.

Good thing, China wins twice. The United States is bound to lose.