The Chinese currency is increasingly attracting the attention of investors, especially after such strong fluctuations of the ruble against the dollar and the euro.
The ruble exchange rate against the Chinese currency during 2014 deviated from only five to seven percent. Therefore, the stability of this currency to save capital is much greater than the dollar or the euro.
What is the Chinese currency? Chinese currency to ruble
The exchange rate of Chinese currency is from eight and a half to nine rubles per yuan.
Chinese yuan is designated as CNY. One yuan consists of ten jiao or one hundred fen. In the thirties of the twentieth century, silver coins began to be issued. However, after the reform, silver coins were withdrawn from circulation and replaced with paper money. The attachment to silver ceased, and the yuan was reoriented to gold. But the yuan did not have real gold supply. As a result, over the course of ten years, the renminbi has fallen more than a thousand times against the dollar.
In the late forties, another reform was carried out in China, and the authorities established the gold content of the renminbi. The dollar was worth four yuan. But after the devaluation at the end of the year, the dollar settled at twenty yuan.
Since 1994, the dollar has become worth eight yuan. And since 2005, China has decided to abandon dollar dependence. The course began to be established on the basis of several currencies. It was believed that thanks to such actions, the national currency of China will become more sensitive to global currency trends, and the financial system of the country as a whole will strengthen.
As the global crisis of 2008 showed, the 2005 decision was correct, and the Chinese currency at that time suffered less than some other currencies. The ratio of “Chinese currency to ruble” in mid-2008 was three rubles and forty kopecks. And by 2009, the yuan was already worth five rubles.
RMB Savings
From 2005 to the 2008 crisis, the Chinese currency appreciated by about a third against the ruble and all other currencies. This is due to the self-sufficient economy of China, a large percentage of exports, strict monitoring by the central bank of the renminbi rate, and stabilization of the exchange rate in necessary situations. In addition, China, which acts as a buyer of energy resources on the market, benefits from lower prices.
Financial policy in the future is designed to strengthen the national currency. Therefore, despite the strong fluctuations of freely convertible currencies, the yuan is becoming one of the most reliable currencies for storing its savings.
Forecasts of foreign experts
In recent years, China's economic growth has declined, so in 2015 a slight weakening of the position of the Chinese national currency is expected.
For example, a representative of a Singapore bank believes that in the second half of 2015, the renminbi will decline by two point three percent. At the same time, economists in Europe believe that by the middle of the year ten yuan will be equal to one dollar and fifty-seven cents (currently ten yuan is equal to one dollar and seventy cents). Representatives of HSBC testify that the central bank will hold two cuts in the key rate this year , which could weaken the yuan by three to four percent.
Forecasts of Russian Analysts
Analysts in Russia, on the contrary, believe that there are serious factors in which the ratio of the Chinese currency to the ruble strengthens and the yuan expects growth. It:
The main buyers of Chinese goods are the United States and South Korea. Purchasing power in these countries is increasing, and therefore additional exports from China may be sent to these countries.
Since oil prices have fallen significantly, the country will save significant funds on the purchase of hydrocarbons.
In addition to oil indicators, China will be able to rely on favorable prices for natural resources due to improved relations with Russia.
Due to these factors, Russian analysts believe that the negative tendencies of the weakening of the yuan will smooth out. And, most likely, the Chinese currency will strengthen against the ruble, the dynamics of the development of the renminbi will grow in 2015.
Therefore, they recommend that investors and citizens with the goal of saving money think about the yuan. The Chinese currency is so tied to the ruble today that in Russia it will now be possible for some banks to open a deposit in RMB.