Regarding Lagarde's statement on June 5438+04, the relevant person in charge of Bank of China said: "RMB's participation in SDR will help to enhance the representativeness and attractiveness of SDR and improve the current international monetary system, which is a win-win result for China and the world."
It is undeniable that the expansion of SDR basket will help to enhance the stability, representativeness and legitimacy of SDR, and help the current international monetary system to develop into a more stable multi-reserve monetary system.
In terms of stability, Indian economist Abend Sabramania (Arvind
Subramanian) previously pointed out that the currencies of seven of the ten East Asian countries have higher correlation with the RMB than the US dollar, and the RMB will appreciate by 1%, and the currencies of these seven countries will appreciate by 0.55%, while the US dollar will appreciate by 1%, and the currencies of the seven countries will only appreciate by 0.34%.
As for representativeness and legitimacy, Qiao Yide, vice president and secretary general of Shanghai Development Research Foundation, told China Business News earlier: "At present, apart from the euro replacing the German mark and the French franc in 2000,
The composition of SDR basket has not changed for a long time, and it can't reflect the changes in the pattern of world economic power and the international use and trading of various currencies. Therefore, the SDR
It is necessary to expand the basket to a moderate scale. "
He said that if RMB was added to the basket in the last assessment, the exchange rate fluctuation of SDR against USD, GBP and RMB would be greatly reduced from 20 1 1. "According to our calculation, 13%, 2 1% and 17% can be reduced respectively."
Of course, SDR still has its own shortcomings. As far as the function of money is concerned, SDR only has the functions of value standard, storage and bookkeeping, and its function as a storage means is also limited by the lack of assets priced by SDR. In addition, SDR lacks basic functions as a means of circulation and payment.
So Elena, director of the triffin Foundation,
Flohr also recently suggested that the official departments should take the lead in providing an appropriate structure to help the SDR market operate. "During the period of 1975- 1985, SDR was used for bonds, syndicated loans and, to a certain extent, commercial bank deposits and certificates of deposit. Some governments have issued bonds denominated in SDR.
(such as Sweden) but not reaching the critical mass. At present, international institutions and governments such as IMF are the most likely candidates to issue SDR bonds. Its main goal is to reduce foreign exchange risk, which is less volatile than a single currency in a basket of currencies. "
On the investor side, Elena
Flohr believes that central banks are the most likely candidates to invest in SDR financial assets, and sovereign funds or pension funds can also diversify their assets.
Promote financial market reform in China.
For China, RMB's entry into SDR is not only the IMF's recognition of RMB's internationalization process, but also China's commitment to continue to promote the financial reform, including the opening of capital account.
Zhu Haibin, chief economist of JPMorgan Chase China, said: "The inclusion of the RMB will be interpreted as the official recognition of the RMB as a freely usable currency by the IMF, which also indicates that the international community recognizes the importance of China in the international financial market. This will further promote the process of domestic financial reform and capital account opening in China. "
In fact, since the beginning of this year, domestic reforms have been accelerating. At the end of April, China Bank approved a large number of overseas institutions to enter the inter-bank bond market. On July 14, the central bank further announced that the quotas of three types of overseas institutions, namely, overseas central banks, sovereign wealth funds and international financial organizations, will be completed through the filing system without approval, and the investment scope will be expanded to more varieties.
August 1 1 The new round of RMB exchange rate reform is a milestone. The central bank announced that it would further improve the quotation of the central parity of the RMB exchange rate, referring to the closing exchange rate on the last day of the inter-bank foreign exchange market, and at the same time, the RMB depreciated by about 3% in the short term. Marcus, Deputy Director of the Asia-Pacific Department of the International Monetary Fund
Rodlauer said in a conference call, "China is constantly changing from a managed exchange rate system closely pegged to the US dollar to a more open, flexible and market-based exchange rate system, and the RMB should be able to float freely within 2-3 years."
In addition, it is reported that the Bank of China may announce to extend the trading hours of the inter-bank foreign exchange market in the near future.
Delayed from the current 16:30 to 23:30 to cover European trading hours and meet the requirements of SDR's extensive trading in "major foreign exchange markets in the world". The plan may be implemented before the end of 1 1.
Especially at the end of September, China released official foreign exchange data to the IMF for the first time, becoming one of 96 countries that disclosed quarterly data, thus greatly improving transparency. In June+10, 5438, China announced the adoption of the IMF Special Data Dissemination Standard (SDDS).
In terms of interest rate, the Ministry of Finance will issue three-month book-entry discounted government bonds every week from the fourth quarter. Technically, the SDR interest rate will be formed on the basis of the three-month national debt interest rate of its constituent currency, and an effective three-month national debt market is one of the technical prerequisites for joining the SDR basket. From the first issue
three
Judging from the issuance of discounted government bonds last month, the subscription is positive and the interest rate also reflects the short-term interest rate well.
Guan Qingyou, Executive Dean of Minsheng Securities Research Institute, believes that the Bank of China is expected to continue to promote reform in three aspects in the next stage. First, relax the restrictions on cross-border issuance of RMB bonds, which not only relaxes the restrictions on the issuers of panda bonds, but also supports government agencies and encourages domestic enterprises to issue RMB bonds overseas; Second, promote the two-way opening of the stock market, on the one hand, allow overseas institutions to carry out equity financing in China, on the other hand, officially launch the pilot project of overseas investment by qualified domestic individual investors; Third, continue to develop the RMB payment and settlement system.
Help China bond market to connect with the international market.
In the medium and long term, RMB's participation in SDR may enhance the global appeal of China's bond market.
As mentioned earlier, as early as July this year 14, the central bank allowed three types of overseas institutions to participate in the inter-bank bond market through the filing system, but it seems that there are not many "actors". At that time, people in the industry also told reporters that at present, the proportion of China bonds held by overseas investors is less than 3%, which may be due to several reasons.
The first is trading activities. According to the data of the Institute for International Economics, the turnover rate of China's national debt is between 0.3 and 1.9, while the turnover rates of US national debt and Japanese national debt are 10 and 5.9 respectively. The turnover rate is an index to measure the turnover of bonds in the secondary market. The higher the number, the more active the transaction.
In addition, institution building and international trust cannot be ignored. Industry insiders told China Business News: "For example, major foreign central banks will prefer long-term varieties, such as long-term national debt, local debt or policy financial debt. But only if they have confidence in China's long-term financial reform can they really want to enter the China bond market. In addition, overseas institutions are relatively lacking in talent reserves for understanding China's credit bond market. "
The entry of RMB into SDR will enhance the confidence of the international community in China. Guan Qingyou said that in the medium and long term, a series of reforms that the government has taken and will take will inevitably bring multiple impacts to the bond market: First, the existence of spreads will continue to attract overseas funds in the medium term; Second, in the long run, the bond yield will decline and the spread will be eliminated; Third, the entry of foreign institutions has increased the sensitivity of market interest rates and promoted the formation of effective yield curve; Fourth, the rating system is in line with international standards, and the potential price fluctuation of credit bonds with large differences between domestic and foreign ratings increases.
According to the analysis of Nomura Securities, the current bond market in China is about US$ 40 billion, with foreign investors accounting for only 2.4%. This ratio is 5.7% in India, 6.5% in South Korea, 18.6% in Thailand, 18.6% in Malaysia and 36.5% in Indonesia, which shows that China has great opportunities. The expectation of further monetary easing will be more favorable to the bond market, and opening the domestic bond market will slow down the outflow of foreign capital and domestic capital, which is particularly important in the context of the expectation of RMB depreciation.
Long-term or enhance the attractiveness of the China stock market
The stock market can be described as the closest part of life, and "Can RMB joining SDR enhance the attractiveness of China stock market to foreign investment?" Naturally, it has become the most common problem in the near future.
Miao, co-head of Hebao Asia Pacific Stock, told China Business News: "Because of SDR.
Allocation is originally one of the global central bank reserves, and RMB will naturally become the global central bank reserve currency, which may alleviate the expectation of RMB depreciation in the international market, and the exchange rate risk borne by global investors investing in A shares may be reduced accordingly, which may stimulate their interest in investing in A shares. "
Coincidentally, Luo Yi, chief analyst of Huatai Securities, believes that RMB internationalization can be described as a "catalyst" in the capital market. "The internationalization of RMB represents the promotion of the status of the whole financial system and the increase of opportunities to make money on behalf of the financial system. As foreign capital continues to enter China, it means that the equity market will be continuously allocated. "
However, Kevin, global investment strategist at Rothschild Wealth Management,
Gardner's view almost represents the attitude of most foreign investors towards A shares. He told China Business News: "SDR is more symbolic. In the long run, it will stimulate investors' interest in the A-share market, but it may not have an immediate effect in the short term, and everything is gradual. "