December 1, 2008 closing price of 6.8850 yuan RMB exchange rate, compared with the previous day's close of 6.8306 yuan depreciated 0.8 percent, the largest single-day variation margin since the foreign exchange reform. December 2 RMB against the US dollar fell to 6.8870 yuan, hit a two-day trading range lower limit "limit." December 2, the National Foreign Exchange Trading Center yuan against the dollar in midday Quote System reported 6.8870 yuan, the second consecutive day to reach 0.5% of the day trading range limit. According to the analysis of bank currency traders, yesterday the central parity of RMB against the US dollar can be interpreted as two, one central bank devalued supportive, and second, do not want to depreciate too quickly, the central bank may be suppressed by the central parity of RMB exchange rate decline. Three factors causing devaluation. With the first external economic downturn, recent indicators have worsened China's leading export severe, shows export growth is facing significant downward pressure, the RMB exchange rate more flexible in line with the Government to maintain financial stability objectives. Secondly, the last two months CPI, PP fell sharply exacerbate deflationary pressures continue to appreciate. Third, the next will continue to cut interest rates, while the US rate cut is not a large space, but also spreads reversed the yuan appreciation weak. However, if the RMB devaluation will fuel protectionist sentiment, and may make large capital outflows. RMB devaluation, foreign trade benefit aviation damaged. The sharp depreciation of the RMB is for "growth", will work to promote the recovery of export-oriented enterprises. Specifically textiles and clothing, electronic appliances, toys, footwear, furniture, building materials, construction machinery and so on. Since last year, the RMB appreciation led to foreign trade enterprises be a very big impact, export processing trade industry along the coast have been closed down. Devaluation benefit most devaluation of foreign trade. Or devaluation plunged the airline industry. Exchange gains is a major part of the airline previously buffered losses to Air China semi-annual report, for example, in the first half of the currency against the dollar by 6.5%, the company achieved a net exchange gain of 19.8 billion Excluding this loss of about 0.05 yuan per share . The same is true of other airlines, such as the yuan continues to depreciate, foreign currency exchange losses on liabilities arising from the performance will undoubtedly bring a new hit. For the renminbi against the US dollar limit rare phenomenon, People's Bank of China official said the central bank will continue to maintain the RMB exchange rate reform on the basis of the exchange rate basically stable. December 1 RMB exchange rate does not drop out of range. And November 28, the General Office of the central bank deputy Ren Luorui told Hong Kong media said that the RMB against the US dollar remained relatively stable recently, as the trend of the future, it depends on supply and demand in the foreign exchange market and the dollar and other currency exchange rates. Earlier, central bank governor Zhou Xiaochuan once said do not rule out the possibility of devaluation. Devaluation effects: Advantageous: (1) devaluation impact on import and export income, which is conducive to domestic exports of goods and services, will attract foreign tourists to accelerate the development of tourism, while devaluation also have an impact on international capital flows. (2) China's foreign trade income tends to be improved, the whole economic system, the proportion of foreign trade will expand, thereby increasing the degree of China's opening up, can have more domestic products to compete with foreign products. Unfavorable: (1) On the one hand, the expansion of exports, rising prices caused by demand-pull; on the other hand, by increasing the domestic production cost-push price increases, the impact of devaluation on prices will be gradually extended to all commodities, could trigger inflation. (2) If the depreciation trend continues to develop, then people will transfer funds to other countries, causing capital outflows. Meanwhile, the withdrawal of external speculative funds may even come in the early savings, investment funds will be evacuated, and may even appear in the Mainland capital flight.