USD to RMB exchange rate is the most stable in the world

On September 29, the RMB against the US dollar plummeted, making it rushed to the top topic. In fact, not only Chinese Yen is falling, other currencies are facing a  more heavy impact.

Federal Reserve continuously raises interest rates is the main reason for it. The Fed's interest rate hikes usually cause a great disturbance to the global economy, triggering capital withdrawal and sharp exchange rate depreciation in some countries, especially emerging market countries.

The Fed has raised interest rates five times so far this year. Why do Fed rate hikes cause other countries' currencies to fall?

When the Fed raises interest rates, it means you can earn higher interest if you hold dollars. In this case, companies and ordinary people will choose to exchange their currency for US dollars. Secondly, it is accompanied by domestic inflation in the United States, and the global inflation crisis brought about by the dollar liquidity crisis. Under this circumstance, the Fed started this round of interest rate hike policy, which will inevitably lead to the return of international capital to the US dollar. Because the U.S. dollar rate hike means that the U.S. dollar index will rise, other countries' currencies will inevitably depreciate.

Let's take a look at the performance of some national currencies after the Fed raises interest rates.

The Russian ruble suffered a round of slumps due to the Russian-Ukrainian war but unexpectedly rebounded by 30% compared to the rate before the conflict between Russia and Ukraine, making it the best-performing currency in the world this year.  Although Rmb fell to 7.2, it is the most stable currency compared to others. The euro, Indian rupee, Thai baht, South Korean won, Japanese yen, etc., have been moderately impacted, and Turkey's lira in the Middle East country has depreciated by 95%, which is really shocking.

However, in this case, China has chosen a monetary policy that is completely opposite to that of the United States. The United States chooses to raise interest rates, while China chooses to cut interest rates. what about this?

China utilizes quantitative easing monetary policy to allow more capital to flow back into the market to stimulate post-pandemic economic recovery and promote domestic economic development. But as we just said, because China and the United States are currently using different monetary policies, this will inevitably lead to a scissors difference in interest rates between the two sides, resulting in the continued depreciation of the RMB. At the same time, the interest rate cut has also given some companies a chance to breathe, thereby preserving the jobs of the people.

Everyone is waiting for the US dollar interest rate hike to pass so that prices and currencies can return to their normal values. 

But many people have made an extra profit from the U.S. dollar rate hike. Just like those Chinese cross-border e-commerce and export companies owners who hold U.S. dollars, a good exchange makes them obtain quite high profits. And you can convert USD to CNY on Epay.com.

As for how the exchange rates of various countries will behave in the future, let's wait and see!