On May 31, the central parity rate of the RMB exchange rate in the inter-bank foreign exchange market, the US dollar/RMB central parity rate, was 7.0821, an increase (RMB depreciation) of 3 basis points, and the highest since December 1, 2022.

The spot exchange rate remained volatile, with the onshore yuan falling below the 7.10 mark against the US dollar for the first time since November 30, 2022. The offshore yuan fell below the 7.11 mark against the US dollar, down more than 200 points on the day.

Looking ahead to the future trend of the RMB exchange rate, experts generally believe that there is no large depreciation space for the RMB. In the view of Feng Lin, senior analyst of Oriental Jincheng Research and Development Department, in the short term, the RMB "breaking 7" trend or will continue for a period of time, with the Fed entering the closing stage of this round of interest rate hike process, coupled with the impact of the US banking crisis, the downward pressure on the US economy is further increased, and the possibility of the US dollar index continuing to rise in the later period is unlikely. In this year's overseas economic downturn, domestic economic recovery prospects, there is no large depreciation of the RMB. "In the second half of the year, as the domestic economic repair process continues, and taking into account other influencing factors, the RMB exchange rate against the US dollar is likely to have a slight appreciation of about 2.0%, that is, from 6.95 at the end of last year, a slight rise to about 6.8." Feng Lin predicted.

For the future trend of the RMB exchange rate, Lian Ping, chairman of the China Chief Economists Forum, chief economist and director of the Research Institute of Zhixin Investment, said that the RMB exchange rate against the US dollar will remain basically stable. "Looking ahead to the next stage, with the downward pressure on the U.S. economy, the debt ceiling impasse and the fermentation of banking risks, the support momentum of the dollar index is more limited." After the second quarter, domestic economic growth will pick up significantly, and foreign exchange settlement and sales of international payments will maintain a surplus, which will support the RMB exchange rate." Lian Ping believes that the depreciation probability of the RMB exchange rate since the beginning of May is phased, and the RMB exchange rate may appreciate during the year.

"This time, the renminbi broke the '7' level, which is the result of multiple internal and external factors." Said Bian Yang, a researcher at the National School of Opening Up and associate professor at the School of Finance at the University of International Business and Economics. External factors are mainly reflected in the rise of the US dollar index. After the rate-setting meeting in early May, the chances of the Federal Reserve cutting interest rates in the near term have diminished significantly, while the increased risk of default on US Treasuries has sparked risk aversion, pushing the dollar index to a seven-week high on May 17. As a result, major currencies such as the euro, pound, and yen have depreciated against the dollar, and the renminbi has not been spared. Internal factors are reflected in China's economic data in April did not meet expectations. Retail sales of consumer goods, industrial added value above designated size and fixed asset investment data released by the National Bureau of Statistics, as well as new renminbi credit and social financing scale released by the central bank all fell short of expectations. In the housing market, although demand is beginning to show signs of recovery, real estate investment and development construction are still showing a downward trend. It can be seen that China's economic recovery still faces many uncertainties, which has affected the sentiment of the foreign exchange market. On the other hand, in April, CPI rose 0.1% year-on-year, PPI fell 3.6% year-on-year, low inflation environment and unbalanced recovery structure superimposed on each other, so that the market for China's monetary policy further easing expectations increased, bringing downward pressure on the renminbi.

Bian Yang also said that this is only a temporary fluctuation. In the medium to long term, the dollar index may have peaked as the likelihood of a US recession increases; The IMF and the United Nations recently raised their forecasts for China's economic growth, indicating that the overall trend of China's economic recovery remains stable. As a result, the RMB/USD exchange rate is expected to return below "7" in the third quarter after short-term fluctuations.