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People’s Daily: RMB Appreciation Hits New Highs

People’s Daily recently reported that the Chinese currency (RMB) exchange rate reached a new high in ten of the trading days in April. This was the largest round of appreciation since 2005. The appreciation level so far this year was over six times more than the level of the entire last year. However, the report expressed the belief that, based on the basic data of the Chinese economy, this round of RMB appreciation seems to be overheated. The State Administration of Foreign Exchange recently announced regulations to tighten up control over foreign exchange inflow. This move effectively cooled down the inflow of hot money, which was widely considered to be the result of the monetary “easing” policies of Japan, the U.S., and the European Union. Experts suggested that the appreciation may become an obstacle for Chinese exports and that the RMB has room for depreciation.
Source: People’s Daily, May 11, 2013