2025-12-25 04:21:28

The offshore RMB has broken 7, approaching the 6 level again.

Today is another day of holding dollars and waiting for depreciation.

Thinking back to the beginning of the year, the exchange rate was still at 7.35, meaning 7.35 million RMB could be exchanged for 1 million USD. At that time, if you deposited this 1 million USD into a USD fixed deposit account with a 4% annual interest rate, after one year it would grow to 1.04 million USD.

Sounds good, right?

But here’s the problem. Now the RMB has appreciated, and the exchange rate has fallen to 7.05. When converting that 1.04 million USD back to RMB, it’s only about 7.332 million. After a year of fluctuations, not only did you not make much profit, but you actually lost about 18,000 RMB.

This is the current situation—thinking you earned interest, but the exchange rate change wipes out all gains and even costs you. If you exchange outside the market, the rate would be even lower, resulting in a more thorough loss.

So, the main theme of the 2024 market can be summarized in eight words: stocks, bonds, exchange rates, digital assets—all under pressure. There’s no way to avoid it.

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TokenEconomist

· 6h ago

Actually, let me break this down—the real issue here isn't just forex headwind, it's a fundamental misalignment of incentive structures. Think of it this way: you're getting paid 4% nominal yield but eating X% currency depreciation. The net present value becomes negative when ceteris paribus your base currency strengthens. Classic carry trade gone wrong.

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