RMB'S New Low Speculators Lost More Than $2 Billion

< p > expanding the volatility will not produce the trend of RMB appreciation or depreciation in the near future, but today's market performance has sounded the alarm for the outflow of hot money and the huge losses of offshore RMB Chinese enterprises speculators.

< /p >

Since March 7th this year, the offshore renminbi has fallen by 1.1% against the US dollar. Dariusz Kowalczyk, a senior economist at the Bank of Canada's investment bank, Dongfang Huili, warned that the onshore RMB against the US dollar or below 6.19 will have a significant impact on the offshore RMB market and Chinese enterprises.

< /p >

< p > foreign media reports believe that China has suppressed the influx of hot money caused by foreign investors' speculation in Renminbi appreciation, and the depreciation of the renminbi has been a great blow to those domestic companies that bet on appreciation.

< /p >

< p > and many of these enterprises are borrowing and selling this kind of bet trade to sell the US dollar to buy RMB. The fall of the renminbi will cause them to suffer huge losses.

< /p >

< p > the commonly used tools for the above enterprises are RMB redemption < a href= "//www.sjfzxm.com/news/index_c.asp" > forward contract < /a > (TRF).

Morgan Stanley Asia Monetary and interest rate director Geoff Kendrick estimates that the loss of such TRF will reach US $2 billion 300 million, involving a total value of US $150 billion.

< /p >

< p > Kendrick predicts that the RMB will fall by 2% against the US dollar this year.

< /p >

< p > Kowalczyk is estimated that the current TRF value is about $60 billion, and the appreciation of the RMB Offshore exchange rate appreciation is usually small and medium-sized enterprises in mainland China and Taiwan.

< /p >

< p > if the US dollar rises to 6.15 against the RMB Offshore exchange rate, banks will no longer provide loans to these enterprises.

Now that the exchange rate has exceeded 6.20, some clients of the eastern side are facing huge leverage losses.

< /p >

< p > last month, Kendrick's example of TRF investment loss: < /p >

< p > assuming that you have a value of 350 billion dollars and the above contract that expires in a year, once the RMB falls against the US dollar, the 0.1 decline in the exchange rate will lead to a loss of about 500 million dollars a month, which means a loss of $6 billion a year.

< /p >

< p > but because these contracts are not pparent and open, it is impossible to know the exact "a href=" //www.sjfzxm.com/news/index_c.asp "> /a > line" EKI ". Kendrick estimated that the price would be between 6.15 and 6.35.

< /p >

< p > he also estimated that the total value of the products sold by the banks could be around us $350 billion since 2013. From the beginning of 2014 to the end of February, the size of such TRF is still $150 billion.

< /p >

< p > assuming that EKI is 6.20, that is, the "red line" warning above Kowalczyk. Kendrick predicts that compared with EKI, the monthly average loss of TRF will be about $200 million for every 0.1 of the US dollar against the offshore RMB exchange rate.

The contract for such TRF is usually 24 months, so the total loss will amount to about 4 billion 800 million dollars.

< /p >

< p > and at the end of December last year, the NDRC once revealed that this year is the peak of debt repayment for Chinese enterprises, and it is estimated that there will be 100 billion yuan of city investment bonds payable.

If the above speculative enterprises are the investors of some credit products, investors should be more worried about credit products.

< /p >

From this perspective, Chinese enterprises bet on the loss of RMB speculation will exacerbate China's credit default risk, and this year's already high risk is even more precarious.

< /p >

< p > the market generally believed that the central bank's guidance to lower the yuan was to pave the way for exchange reform. Today's market volatility reaction may be a test of the willingness of the Central Bank of China to reform.

< /p >

< p > Britain reported that many analysts believe that the recent "a href=" //www.sjfzxm.com/news/index_c.asp "RMB" /a "depreciation is just some conditioned response, and it will not last.

< /p >

< p > Capital Economics, a macro research institution, thinks that the main restriction factor of RMB is not the volatility of trading price, but the control of the Central Bank of China on the middle price.

As long as the price is not given to market forces, the way of the renminbi will continue to be in the hands of policymakers.

< /p >

P may be even more alarming. In the meantime, while the fluctuation of RMB is increasing, China's real estate market and corporate financing market are facing serious challenges.

< /p >

In February, China's 70 big and medium cities prices rose 8.7% over the same period in January. After the first fall in January, the rate of housing prices continued to slow down.

< /p >

< p > according to the same day's report, the cost of issuing bonds of some 3A rated central enterprises exceeds the benchmark lending rate of 10%, while local 3A enterprises exceed 20%.

The high interest rate of corporate bonds is seriously squeezing the profit margins of Chinese enterprises.

< /p >