Views: 1 Author: Site Editor Publish Time: 2022-10-01 Origin: Site
RMB breaking 7 means that the amount of RMB exchanged for 1 US dollar exceeds 7 yuan, that is, the RMB depreciates further.
The reason why the RMB broke 7 is mainly because the US dollar is still strong now. Once the Fed raises interest rates, the world's currencies will depreciate, because the whole world is going to exchange the US dollar.
After the exchange rate reform in 2015, in August 2019 and the beginning of 2020 two rounds of RMB broke '7' and then returned, so this '7' is not like the age of a person, if it is broken, it will not come back, nor is it a dam , if it is broken, it will collapse for a thousand miles.
The U.S. dollar has raised interest rates and the global dollar has returned. In the global mainstream currencies, the RMB depreciated by -9%, the British pound -18%, the euro -15%, the Japanese yen -22%, the Australian dollar -7%, the Canadian dollar -4%, and the Swiss franc -8%.
In fact, in the SDR basket, the US dollar has appreciated, and the RMB has also appreciated, but the US dollar has appreciated more than us.
Apart from the depreciation of the US dollar, the RMB exchange rate has appreciated against other major currencies this year.
Let's take the Japanese yen as an example. In 2020, 1 RMB can be exchanged for 14 yen, and now 1 RMB can be exchanged for 20 yen, which has reached a record high.
When the exchange rate of RMB exceeds 7, that is, the devaluation of RMB, which means that we also get a salary of 10,000 yuan, and we can buy fewer goods than before, and our cost of living will be relatively higher.
But the volume of exported goods may also increase because our goods will be more competitive in the international market.
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