After the RMB exchange rate bottomed out in late May 2020, it has continuously rebounded for one and a half years, by more than 10%, which is rare in the history of the RMB exchange rate. This article first analyzes the reasons for the appreciation of the RMB exchange rate, including China’s effective control of the epidemic, the fall of the US dollar index, the spillover effects of developed countries’ monetary policies that have pushed international capital into China and the superposition of expectations, and inferred that the real exchange rate of the RMB is expected to return to the path of long-term appreciation. Then, the article points out that on the whole, the positive effect of RMB appreciation on China's economy is far greater than the negative effect. The appropriate appreciation of RMB is conducive to economic growth, offsetting the rising inflationary pressure, providing a buffer and defense for monetary policy and financial markets, and creating a stable environment and positive social expectations for China's reform and transformation. Finally, this paper provides relevant policy suggestions to deal with the appreciation of RMB exchange rate.
