RMB/USD: Slight depreciation of the exchange rate in May 2009

The RMB/USD rate slightly depreciated in May 2009. The exchange rate decreased by the small margin of 0.14 per cent in May 2009, thereby neutralizing the 0.15 per cent gain of April 2009. The exchange rate is thus stable around RMB/USD 6.835 since January 2009. It is clear by now that in the wake of the global financial and economic crisis RMB appreciation is off the table for the Chinese authorities.

RMB/USD: Slight appreciation of the exchange rate in April 2009

After no movements in the exchange rate over the first quarter, the RMB/USD rate slightly appreciated  in April 2009. The exchange rate rose by the small margin of 0.15 per cent to RMB/USD 6.285 at the end of April. This is too small a move to signal a change in stance of the Chinese authorities; they put on hold the RMB appreciation against the USD in the wake of the global financial and economic crisis.

RMB/USD: Stable exchange rates in March 2009

Still, no RMB/USD exchange rate movements in 2009. The Chinese authorities continue to put on hold the RMB appreciation against the USD in the wake of the global financial and economic crisis. The exchange rate was stable at 6.84 on the first and the last trading day of the month of March. The same is true for the whole first quarter 2009.

RMB/USD: Stable exchange rates again in February 2009

No exchange rate movements are recorded so far in 2009. As in the recent months of the past, authorities still continued to put on hold the RMB appreciation against the USD in February, virtually fixing the exchange rate. On the first and the last trading day of February the RMB/USD rate was stable at around 6.83. For those, who still disavow this fact of stalled RMB appreciation: This is here to stay!

RMB/USD exchange rate: Appreciation still on hold in January 2009

As a response to the turmoil of the global financial crisis the Chinese authorities put on hold the RMB appreciation against the USD, which still reached 6.8 per cent over the full year 2008. But as the pace of appreciation slowed considerably since October 2008, this trend still continued in January 2009. Over the course of the month the RMB/USD exchange rate was virtually unchanged. On the last trading day of January 2009 – i.e. 23 January due to the Chinese New Year festivities – the exchange rate  stood at RMB/USD 6.83.

The stop of appreciation is here to stay for some time. Just consider what the Chinese Premier Wen Jiabao said in an interview with the Financial Times published on 02 February 2009: “I want to make it very clear that maintaining the stability of renminbi at a balanced and reasonable level is not only in the interests of China but also the interests of the world,” he says. “Many people have not yet come to see this point that if we have drastic fluctuation in the exchange rate of the renminbi, it would be a big disaster.” Regardless whether right or wrong, given this perception don’t expect any changes soon in 2009.

RMB/USD exchange rate: 2008 appreciation 6.8 per cent

While the RMB appreciation slowed considerably in recent months, overall yearly appreciation against the USD reached 6.8 per cent in the period from beginning of January to end of December 2008. The rate is similiar to 2007, where 6.9 per cent appreciation was reached, respectively.

The fast pace in the beginning of the year with monthly rates of appreciation of up to 1.6 per cent – mainly employed to slowdown the economy and ease inflationary pressures – was offset in recent months. In fact appreciation of the RMB seems to be virtually on hold since October 2008. After some slight depreciations in October and November the exchange rate appreciated again by 0.23 per centgae points. Thus, as a whole, the last quarter saw a fairly stable exchange rate of around RMB/USD of 6.83.

RMB/USD exchange rate: Appreciation on hold in November 2008

RMB appreciation seems to be on hold since October 2008. In November, the  RMB/USD exchange rate  again depreciated slightly by 0.1 per cent. Still, cumulated appreciation of the RMB against the USD in 2008 is around 7 per cent.

RMB/USD exchange rate: Appreciation on hold in October 2008

After a considerably slowing of the pace of appreciation of the RMB against the USD in recent months, RMB appreciation halted in October. In fact, the RMB noted even 0.11 per cent higher than on 26 September representing a slight depreciation in October compared to September. Appreciation of the RMB in 2008 thus stands at 6.93 per cent.

RMB/USD exchange rate: 2008 appreciation (ytd) is 7.04 per cent at end-September

The last trading day on the Chinese markets before the “golden week” October holidays fell on 26 September. Data for September shows that for this month the appreciation of the RMB vis-a-vis the USD continued the slow path of previous months with a mere 0.2 per cent cumulated appreciation. It is clear now that the authorities in China shifted to a preference of a slower rate of appreciation after strong appreciations in the beginning of this year. This certainly is connected to the perceived lower inflationary thread currently.

RMB/USD exchange rate: 2008 appreciation (ytd) is 6.84 per cent at end-August

Monthly appreciation of the RMB vis-a-vis the USD further slowed in the Olympic month of August to a mere 0.11 per cent. The appreciation pace thus clearly lost momentum in Summer 2008. Still, accumulated appreciation of the RMB/USD exchange rate in 2008 now is at 6.84 per cent.