Against the backdrop of significant fluctuations and a drop of over 10% in the US dollar index this year, the RMB exchange rate against the US dollar has demonstrated resilience in a two-way floating pattern, showing a "stable to strong" pattern. As of July 23, it has appreciated by nearly 2% compared to the beginning of the year and maintained basic stability. Analysts generally believe that the stable performance of the RMB exchange rate is the result of the interweaving of internal and external factors, among which endogenous driving force is fundamental. With the effective support of economic fundamentals and the timely deployment of stabilizing exchange rate tools, the resilience of the RMB exchange rate will continue. Since the beginning of this year, the US trade policy has disrupted the global financial market, leading to a downward trend in the US dollar index: it reached the 110 level at the beginning of the year and then fell below the 100 level. As of today, the US dollar index has fallen by over 10% compared to the beginning of the year. There is usually a corresponding relationship between the US dollar index and non US dollar currencies, that is, when the US dollar index tends to be strong, non US currencies are generally under pressure. However, since the beginning of this year, the exchange rate of RMB against the US dollar has shown a trend of first falling and then rising, and the overall fluctuation range is relatively small, fluctuating in both directions between 7.15 and 7.35. The main tone of the RMB against the US dollar is' stable but strong ', and the onshore market's RMB against the US dollar exchange rate has risen by nearly 2% compared to the beginning of the year. Since June, the overall trend of the Chinese yuan against the US dollar has been relatively stable, with onshore and offshore exchange rates remaining in a narrow range of fluctuations between 7.17 and 7.18. Compared to the fluctuations in the US dollar index, the recent exchange rate of the Chinese yuan against the US dollar has shown a 'reverse fluctuation, with smaller volatility'. The fluctuation range of the Chinese yuan against the US dollar is significantly lower than that of the euro, Japanese yen, and most emerging market currencies. ”Wang Qing, Chief Macro Analyst of Dongfang Jincheng, said. Analysts generally believe that the resilience of the renminbi is supported by endogenous factors. Faced with the ever-changing global financial market, the renminbi's resilience is due to the combined effects of internal and external factors. Among them, endogenous power is the fundamental basis for its stable performance. Since June, against the backdrop of a weak US dollar, the Chinese yuan exchange rate has shown characteristics of 'low volatility and resilience'. In terms of attribution, the weakening trend of the US dollar index, the bottoming out of domestic fundamentals and policy efforts, the more flexible operation of the central bank in stabilizing the exchange rate, and the release of demand for foreign exchange settlement from customers have become important sources of resilience for the RMB exchange rate. ”The Chief Economist of CITIC Securities clearly stated. Wang Qing also stated that since the second quarter, the domestic policy of stabilizing growth has been effective, coupled with various "export grabbing" and "export transfer" effects, and the macroeconomic fundamentals have provided internal support for the stability of the RMB exchange rate, with a "stable to strong" trend. In addition, the central bank's recent policy of stabilizing the exchange rate has become more flexible, and the middle price guidance strategy has sent a clear signal to the market that "I am the main one": adhering to a managed floating exchange rate system based on market supply and demand, maintaining the flexibility of the RMB exchange rate, and promoting market supply and demand balance through price mechanisms. At present, the price difference between the onshore RMB to USD spot exchange rate, offshore RMB to USD spot exchange rate, and RMB to USD middle rate has significantly converged, and has basically achieved "three in one". Wang Qing stated that the middle price regulation mechanism, timely and effective market communication, and the regulatory authorities' relatively rich foreign exchange regulation toolbox are important reasons for the low volatility of the RMB against the US dollar exchange rate. Stable momentum is constantly accumulating, and looking ahead to the future, the RMB exchange rate still faces many uncertainties. But analysts generally believe that the endogenous driving force for the stability of the RMB exchange rate is constantly accumulating. On July 22nd, at a press conference held by the State Council Information Office, Li Bin, Deputy Director of the State Administration of Foreign Exchange, stated that the RMB exchange rate has remained basically stable, which not only reflects a reasonable and balanced level, but also plays a role as an automatic stabilizer of the macro economy. The high-quality development of the economy, steady progress in opening up to the outside world, and enhanced resilience of the foreign exchange market are the three major factors supporting the stability of the RMB exchange rate at a reasonable and balanced level. Donghai Securities believes that in the context of increasing uncertainty in the external economic environment, the importance of China's internal development has become more prominent. In the second half of the year, China is expected to continue to maintain a positive policy tone, and there is still room for further domestic demand policies to stabilize the RMB exchange rate with good fundamentals. (New Society)