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According to Beijing media's report, on September 2, the RMB to U.S. dollar exchange rate made new high: One U.S. dollar fell to 8.0935 RMB, making the RMB appreciate another 0.2% since it was adjusted upwards by 2 percent on July 21.
"Just based on the market sentiments since the currency regime reforms on July 21, the RMB has been on an upward trend." This remark was made on September 3rd on the financing forum of the Capital Finance Expo by Stephen Green, senior regional economist for Standard Chartered Bank.
Doctor Yin Jianfeng with the Financial Research Center of the Chinese Academy of Social Sciences, explained: "If the RMB continues to push upwards, that means that during the period when the RMB is expected to appreciate, the market has been buying RMB and selling U.S. dollars and those organizations holding RMB are not selling and this imbalance of supply and demand has led to upward pressure on the Chinese currency."
"Since July 21, the RMB has been moving steadily upwards for a period of time, then dipped lower, followed by resumed advance." Standard Chartered Bank's Stephen Green described the general market trend.
The RMB currency reference constructed by Standard Chartered, based on a "basket of currencies" also showed the same trend. This means that since July 21, not only has the RMB shown an upward tendency, but also "the basket of currencies".
However, China's central bank has proclaimed that the level of the currency will be set according to market conditions and can go down as well as go up and will not mean it can only trend upwards.
(Chinanews.cn September 6, 2005)
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