What is called a dollar crunch, is it a depreciation of the dollar, and what is the impact of the do

Dollar tightening refers to the Fed's monetary tightening policy to tighten the amount of funds, and the dollar in the market will decrease accordingly, so that the dollar will appreciate relative to other currencies.

Deflationary monetary policy is popularly meant: ** think that there is too much money in circulation, and hope to reduce the monetary policy adopted a little! Tightening monetary policy is generally in the economy inflation, **** through interest rate hikes to curb consumption growth, control the rapid growth of prices, in order to achieve the purpose of controlling inflation.

Main policy instruments: reduce the amount of money, raise interest rates, and strengthen credit control. If market prices**, excessive demand, excessive economic prosperity, and it is believed that the aggregate demand of society is greater than the aggregate supply, the central bank will adopt a policy of tightening monetary policy to reduce demand.

The impact of the US dollar tightening should be multifaceted, first of all, for the US economy, the relative reduction of US dollars in circulation in the market, the reduction of liquidity, can generally curb high domestic prices, control inflation. On the other hand, the tightening of the dollar means that the Fed controls the currency in circulation by raising interest rates or reducing credit, and the less the dollar is relatively more valuable, and the market is more inclined to hold the dollar, and the exchange rate will definitely rise relative to other currencies. For example, in the past, goods exported from the United States to China may be sold for 1,000 yuan when they arrive in China, plus costs and profits, but due to the rise in the exchange rate of the US dollar against the yuan, the US dollar appears to be more valuable, and if you want to buy the same goods again, you may need to spend 1,500 yuan.

Therefore, the products exported abroad are relatively more expensive. Cracking down on exports is very unfavorable to domestic export-oriented enterprises; On the other hand, for U.S. imports, products from other countries are relatively cheaper. It is beneficial for domestic enterprises that rely on imported materials for development.

Of course, the exchange rate is often subject to the country's macro intervention, which is only a relatively simple understanding, and the actual situation is more complicated than this.

But in the current US economic crisis, the Fed's QE3 has been launched, and it is an unlimited QE3 (quantitative easing monetary policy) until the job market improves, and a large amount of liquidity will be injected into the market every month, and interest rates will remain ultra-low until the end of 2014. So for now, a tightening of the dollar will not be seen for at least a long time.

Pure hand fighting, I'm tired to death!

Not bad, dollar tightening refers to the Federal Reserve's monetary tightening policy to tighten the amount of money, and the dollar in the market will be reduced accordingly, so that the dollar will appreciate relative to other currencies.

Extended information: From the perspective of imported consumer goods and raw materials, the decline in the exchange rate will cause the import of goods in the country. The extent to which it affects the general price index depends on the share of imported goods and raw materials in GDP.

On the contrary, all other things being equal, the ** of imports is likely to decrease, and the extent to which it affects the general price index depends on the share of imported goods and raw materials in the gross national product.

1.Capital flows.

Short-term capital flows are often more affected by exchange rates. When there is a trend of depreciation of the local currency, domestic investors and foreign investors are reluctant to hold various financial assets denominated in the local currency, and will convert them into foreign exchange, resulting in capital outflow. At the same time, due to the conversion of foreign exchange, the shortage of foreign exchange will be exacerbated, which will promote the further exchange rate of the local currency.

On the contrary, when there is a trend of foreign appreciation of the local currency, domestic investors and foreign investors will strive to hold various financial assets denominated in the local currency, which will trigger capital inflow. At the same time, the oversupply of foreign exchange will lead to a further rise in the exchange rate of the local currency due to the conversion of foreign exchange into the local currency.

2.Related Reports.

The U.S. Department of the Treasury submitted the latest "International Economic and Exchange Rate Report" (hereinafter referred to as the "Report") to Congress on the 12th.

First, the report found that China did not meet the criteria for a "currency manipulator" under Section 3004 of the Act. This is the first time in Obama's second term and the ninth in his two terms that he has refused to label China a "currency manipulator." Molded Zen but with a "tail", that is, think:

The renminbi is still significantly undervalued, and there is still a need for further appreciation of the renminbi against the dollar. The report also stresses that the U.S. Treasury Department will pay "special attention" to the pace of renminbi appreciation.

In fact, from the exchange rate reform in 2005 to the beginning of April 2013, the renminbi has appreciated by about 35% against the US dollar. During this period, the serious imbalance between China and the United States has been greatly alleviated, and China's general surplus has been greatly reduced. The cost is that China's export competitiveness has been greatly reduced, China's export enterprises have serious difficulties in operation, and the pull of exports on China's economy has continued to show negative value, which ultimately makes China's economy suffer an unprecedented impact.

At the same time, China's huge foreign exchange reserves have risen rather than fallen. The main reason is that the continuous appreciation of the renminbi has led to a large amount of international hot money entering China for speculation and profit. In this way, the pace of China's exchange rate market-oriented reform has not stopped, and the pace of RMB appreciation has not slowed down, especially in the case of rounds of quantitative easing in the United States, and the RMB has shown a unilateral appreciation trend since last year (2014).