The central bank issued its policy stance on the RMB exchange rate: there is no simple linear relationship between the exchange rate and the current account.

Zhito Finance APP has learned that on October 8, the People's Bank of China's policy stance on the RMB exchange rate pointed out that there is no simple linear relationship between the exchange rate and the current account. The exchange rate is a price relationship between currencies and is affected by multiple factors such as economic growth, monetary policy, financial markets, geopolitics, and sudden risk events. To analyze exchange rate changes, one should not only look at trade in goods, but also at trade in services; not only at the current account, but also at the financial account; and not only focus on economic fundamentals, but also on factors such as expectations.