TechFlow, on May 26, according to Jinshi Data, the central parity rate of the renminbi against the U.S. dollar was raised by 86 basis points to 7.1833, the highest since April 2 and the largest increase since January 21. Wang Qing, Chief Macro Analyst at Orient Golden Fortune, analyzed that recently the renminbi's exchange rate strengthening has been mainly driven by two factors: first, the depreciation of the U.S. dollar has led to a passive appreciation of the renminbi against the dollar. Increased market pessimism over the U.S. government's fiscal deficit and rising debt has caused the U.S. dollar index to fall significantly again recently, driving broad-based appreciation of non-U.S. dollar currencies including the renminbi. Second, recent accelerated implementation of more proactive and effective macro policies domestically has strengthened the resilience of China's macroeconomy against external fluctuations, providing internal support for the renminbi exchange rate. Wang Qing expects that going forward, the renminbi is more likely to experience two-way fluctuations opposite to the dollar’s trend, although with relatively small volatility, making the renminbi more stable compared to other major currencies.
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