It is an important policy goal of China to maintain the stability of renminbi value and the equilibrium of the balance of payments. Since 2021，the COVID-19 pandemic has recurred globally，and the recovery of the world economy remains uncertain. China's economy registers a stable performance with good momentum for growth，its balance of payments is running steadily and its foreign exchange market is more mature and rational. In the first half of this year，China's banks recorded a surplus in foreign exchange sale and purchase，and both the receipt and settlement of foreign exchange for trade in goods remained at a relatively high level，reflecting the steady improvement of the domestic economy driven by the resumption of production and work. The renminbi exchange rate against the US dollar remained basically stable at a reasonable and balanced level. It closed at 6.4612 on the last trading day of the first half of the year，down only 8 basis points from 6.4620 at the beginning of the year，maintaining the stability of the currency value.

The year 2021 marks the start of the 14th Five-Year Plan. China has completed the building of a moderately prosperous society in all respects and made historic achievements of eliminating absolute poverty. Now it is moving toward the second centenary goal of building China into a great modern socialist country in all respects. In the new historical stage，China's foreign exchange situation has also undergone profound changes，and the balance of payments has maintained a basic equilibrium，which has been constantly consolidated. First，the current account surplus as a percentage of GDP has remained below 2% for five consecutive years，a surplus within a reasonable range. In the first half of this year，the current account continued this trend，and cross-border capital flows were also balanced. Second，as the renminbi exchange rate has become more flexible in recent years，its volatility has also increased，but the overall volatility is still lower than that of other emerging economies. Meanwhile，there have been no frequent large fluctuations like some currencies，and the renminbi has shown good stability. In the first half of this year，the historical volatility of the renminbi against the US dollar stood at 3.1%，gradually approaching the volatility of the euro，sterling，yen and other currencies of advanced economies. Third，since the renminbi assets are more cost-effective，the global demand for renminbi asset allocation has been higher than that of other emerging economies. The overall P/E ratio of Chinese stocks is relatively low，and the yield of national debt is significantly higher than that of developed economies，both of which have high investment value. Since 2020，foreign investors have continued to increase their holdings of domestic bonds，reflecting overseas investors' confidence in the prospects of China's financial market.

Foreign exchange is a key to coordinate domestic and international markets. Looking ahead，in the face of the intricate and unpredicted changes in the international markets，China still needs to further coordinate development and security，expand the two-way opening of the financial market，and deepen the reform in the foreign exchange field. The following aspects should be focused on to raise the ability of the financial market to serve the real economy and enhance its international competitiveness. First，further facilitating cross-border trade under the current account. Second，continuing to open up China's capital account at a high level in a prudent and orderly manner. Third，building and deepening an open，diversified and well-functioning foreign exchange market. China needs to support financial institutions in launching more foreign exchange derivatives that meet the market demand，further enrich foreign exchange market products and domestic and foreign participants，and constantly improve the infrastructure of foreign exchange market. Fourth，continuing to improve the capacity for economic and financial management and risk prevention and control in an open environment. China needs to improve the "macro-prudence and micro-supervision" management framework of the foreign exchange market，and improve the "anti-money laundering，anti-terrorist financing，anti-tax evasion" review mechanism，so as to ensure the stable and healthy development of the foreign exchange market.