Abstract：Since June of 2015, RMB has depreciated against the US dollar largely because China’s financial programs are burdened with large deficits, vast amounts of hot money leaves China, and people expect the depreciation of RMB. The depreciation of RMB against the US dollar does not have obvious impact upon China’s import and export, but it increases the burden to pay back foreign debts, and leads to the loss over foreign exchange reserve. However, as China’s economy still grows at a moderate rate, our economy still has current-account surpluses, and we have sufficient foreign exchange reserve, RMB will not devalue against the US dollar by a large margin. Even so, in accordance with currency management principles, China’s monetary authorities should not deliberately hold RMB exchange rate against the US dollar at a certain level but allow RMB exchange rate against the US dollar change according to supply and demand so as to maintain the flexibility of RMB exchange rate against the US dollar to prevent overestimation of RMB exchange rate against the US dollar. In the meantime, we have to crack down on the underground banks and reinforce the management of foreign exchange payments to slow down the devaluation of RMB against the US dollar.
2017, Vol. 34 
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