Analyse fra Natixis:
Since the early 2000s, the spontaneous trend in the Chinese RMB exchange rate has been an appreciation, which has been limited by the accumulation of foreign exchange reserves. Since 2014, the RMB’s spontaneous trend has been a depreciation, due to very significant capital outflows as a result of the falling return on capital in China. The depreciation was halted, until August 2015, by the loss of foreign exchange reserves. What would happen if the Chinese authorities now allowed capital outflows to cause a substantial depreciation of the RMB?
– Expectations of this depreciation could, in the short term, lead to even larger capital outflows from China and a significant trade-weighted depreciation of the RMB as a trend;
– The “currency war” declared by China is likely to entail, in reaction, more expansionary monetary policies in countries competing with China (Japan, South Korea, emerging countries, etc.), causing a depreciation of those countries’ currencies against the dollar and the euro; the depreciation of the RMB will also make the US Federal Reserve more cautious;
– Due to the improvement in China’s cost competitiveness, a decline in share prices can be expected in countries competing with Chinese industry (Japan, South Korea, Germany, etc.); – This more expansionary monetary policy on the global level and the end of the decline in China’s foreign exchange reserves can be expected to trigger a widespread decline in long-term interest rates;
– The stimulus for Chinese industry can be expected to cause a rise in commodity prices.
