Report Summary 1. Report Industry Investment Rating The report does not mention the industry investment rating. 2. Core Viewpoints - In 2024, the RMB exchange rate showed resilience in a complex macro - background. The nominal effective exchange rate index of the RMB increased, and it appreciated against a basket of currencies. Although it depreciated against the US dollar, it was less than most currencies. However, due to the continuous "inversion" of the Sino - US interest rate spread, there was always adjustment pressure on the RMB exchange rate. [8][15] - In 2025, changes in domestic and foreign macro - events may intensify the volatility of the RMB exchange rate. The scale of domestic incremental counter - cyclical regulatory policies and the overseas political and economic situation, especially Trump's re - election, will have an impact on the RMB exchange rate. The differentiation of Sino - US monetary policies may also cause adjustment pressure on the RMB exchange rate against the US dollar. [9][37] - In the short term, macro - prudential tools are crucial for stabilizing the RMB exchange rate, while in the long term, it depends on positive and effective macro - policies. [10][44] 3. Summary by Directory 2024 RMB Exchange Rate Review - **RMB exchange rate trend is highly consistent with China's economic fundamentals**: In 2024, China's GDP growth rate and PMI showed a pattern of "high at the beginning, low in the middle, and rising at the end". The RMB exchange rate against a basket of currencies followed a similar trend. Policy introductions since late September 2024 boosted the GDP growth rate in the fourth quarter and the RMB exchange rate. [8][17] - **The RMB exchange rate remained resilient against the backdrop of a strong US dollar**: In 2024, the "strong US dollar" was a key feature in the international foreign exchange market. Most developed and emerging market currencies depreciated against the US dollar, but Asian currencies, including the RMB, showed resilience due to strong economic performance. The RMB's relatively small depreciation against the US dollar led to its appreciation against a basket of currencies. [9][20] - **The continuous "inversion" of the Sino - US interest rate spread created adjustment pressure on the RMB exchange rate**: The difference in the 10 - year government bond yields between China and the US widened in 2024. The inflation trends in the two countries led to different trends in their 10 - year government bond yields, and the Sino - US interest rate spread and the RMB exchange rate against the US dollar were strongly correlated. [29][32] 2025 RMB Exchange Rate Outlook - **Changes in domestic and foreign macro - events may intensify the volatility of the RMB exchange rate**: In 2025, the domestic expectation of more incremental counter - cyclical regulatory policies and Trump's re - election as the US president will make the global economic and trade pattern more volatile, which may magnify the exchange rate fluctuations of the RMB against the US dollar. [37][38] - **The differentiation of Sino - US monetary policies creates adjustment pressure on the RMB exchange rate**: China may implement more aggressive monetary easing policies, while the US will be more cautious about interest rate cuts due to inflation and tariff policies. The resulting continuous "inversion" of the Sino - US interest rate spread will be a "pressure source" for the RMB exchange rate against the US dollar in 2025. [40][43] - **Stabilizing the RMB exchange rate depends on macro - prudential tools in the short term and positive macro - policies in the long term**: The central bank has increased its regulation of the RMB exchange rate, and short - term regulatory measures have achieved certain results. In the long run, expanding domestic demand, promoting innovation, and ensuring economic stability are the cornerstones for stabilizing the RMB exchange rate. [44][45]