The relationship between RMB appreciation and depreciation and foreign debt

The appreciation of RMB is expected to increase foreign debt borrowing; Devaluation will lead to early repayment of debts. If the foreign debt borrowed is RMB, there will be no related problems.

Foreign debt refers to a country's debt to foreign countries. According to the definition of the International Monetary Fund and the World Bank, foreign debt is "including all liabilities that are obligated to repay non-local residents in foreign currency or local currency".

The repayment method of foreign debt is uncertain, and generally any currency is used when borrowing and repaying. Settlement is an accounting term, and borrowing means two things. Borrowing foreign debts requires registration by the foreign exchange administration, and settlement of foreign exchange and repayment of principal and interest require approval by the foreign exchange administration.

Extended data:

The appreciation of RMB is relative to other currencies, that is, the purchasing power of RMB is enhanced. The reason of RMB appreciation comes from the internal motivation and external pressure of China's economic system. The internal influencing factors are balance of payments, foreign exchange reserves, price level and inflation, economic growth and interest rate level.

In the most popular words, the appreciation of RMB is the enhancement of purchasing power of RMB. For example, in the international market (only in the international market can the purchasing power of RMB be enhanced), 1 yuan can only buy 1 unit of goods, and more units of goods can be purchased after the appreciation of RMB. The appreciation or depreciation of RMB is directly reflected in the exchange rate.

Baidu encyclopedia-RMB appreciation