Guan Tao: the RMB exchange rate and cross-border capital flows have smoothly passed the first stage of the impact of the Fed's tightening, and we still need to pay high attention and vigilance in the later stage

Boc International (China) Co.Ltd(601696) global chief economist Guan Tao said at the "2022 Tsinghua Wudaokou global financial forum" today that the impact of the tightening of the Federal Reserve Policy on China's cross-border asset flows and the trend of the RMB exchange rate has four scenarios or four stages. The first scenario is the moderate and orderly tightening of the Federal Reserve, the slowdown of China's foreign capital inflow and the slowdown of RMB appreciation; In the second scenario, the Federal Reserve may increase interest rates and shrink the table more aggressively, and the RMB exchange rate may rise and fall, with two-way fluctuations; In the third scenario, if the Fed's monetary tightening is stronger than expected, it does not rule out that the RMB exchange rate may be under pressure again; In the fourth scenario, the monetary policy of the Federal Reserve will return to easing, and the RMB exchange rate will be stronger. Guan Tao said that we have smoothly passed the first stage of Fed tightening, but the development and change of the situation is not linear, but may be nonlinear. We still need to pay high attention and vigilance later.