My fintech empire.

Chapter 1225 [Unexpected]

On the next day, Thursday, January 1, the offshore RMB overnight lending rate in Hong Kong continued to soar, with the cumulative increase reaching 5% in two days. At the same time, the RMB appreciated again by 81 basis points today, returning to below 870 to 6.8.

In just two days, the RMB appreciated by nearly 2000 basis points at a lightning speed, directly returning to the level of two months ago. The violent appreciation of two consecutive daily K-lines was a terrifying increase that almost crushed all short sellers.

All players in the foreign exchange market were greatly shocked. They thought that the foreign exchange market was about to stage a battle between bulls and bears that would be even more intense than at the beginning of the year. After all, there were two consecutive "breaking 7" mistakes last month, and the off-market moves were so intense that it gave people a feeling that a storm was about to come.

The result was totally unexpected that the shorts were unilaterally hammered.

There are many reasons for this unexpected result.

Fang Hong's advantages are self-evident. He cooperated with relevant state departments to close the door and beat the dog, raising the overnight lending rate, and continuously pumping out the remaining water in the pool. No one outside would have thought of his plan to buy 10 trillion yuan of currency reserves in the offshore RMB market. This amount would be terrifying if it were exposed.

The reason why the international short-selling forces typed GG and admitted defeat right away was not only that they could not break Fang Hong's trick, but also that their own plans were disrupted by the "black swan event" in the second half of the year. They did not expect that the new leader in North America would be a dark horse. They had never thought that this would happen in the first half of the year. In their eyes, this variable was a "black swan", and it came so suddenly and unexpectedly.

The rise of this unexpected new leader also made the international short sellers feel that things might not be going well at home. There might be infighting, and they didn't know what would happen next. If some unexpected accident happened, such as someone's house being robbed, it would be very troublesome.

Therefore, at this moment, the international short-selling forces have no intention of fighting any longer. They no longer have the momentum they had at the beginning of the year. In addition, their opponent is not so easy to deal with. They have suffered many defeats against him and have no confidence in winning. Now they are still worried about unexpected events in the backyard.

The opponent in front is very powerful. If a "black swan" appears in the backyard, Fang Hong will take advantage of the opportunity to trap him and prevent him from moving forward or backward. If such a bad situation really happens, everyone will be in trouble.

After weighing the pros and cons of all aspects, the international short-selling army had no choice but to give up even though they were unwilling to do so. This is why the foreign exchange trading team of Qunxing Capital had not even started to make any effort, and the opponent was defeated before they could even use their ultimate move.

However, in the next three days, the army of short sellers launched a very powerful counterattack, as if they were unable to win the fight and were ready to run away, but had to say a few harsh words for the sake of face. Three consecutive K-lines of rapid depreciation caused the offshore RMB exchange rate to depreciate by about 6.90 basis points again, and it once again came to around .

……

Around 1 p.m. on January 10th.

Tian Jiayi, who was at the company, called Fang Hong, who was at home. "The short-selling army in the foreign exchange market has been exerting its strength for three consecutive days. Should we fight back strongly? Or should we execute according to the original plan?"

At this moment, Fang Hong, who was watching the trend of the offshore RMB exchange rate and the US dollar index, replied directly: "No, increasing the intensity means increasing the cost of funds. Just keep the water level at 6.9 as planned. This way the cost of funds is relatively the lowest."

Tian Jiayi on the other end of the phone couldn't help but say, "Wouldn't it be better to be more cautious?"

Fang Hong replied calmly with a confident smile: "It's already very stable. If it's more stable, we'll just scare ourselves. Good news has come from the other side of the ocean. The US dollar index has continued to decline since January 1. The pressure from the US dollar has been greatly reduced. The US dollar will inevitably continue to decline. As a result, the RMB will naturally strengthen. So there is no need for us to waste extra capital costs. Our money is not blown by the wind."

Tian Jiayi: "Okay, I know how to arrange it."

……

As expected, in the following days, the offshore RMB exchange rate continued to appreciate. The international short sellers knew that the situation was over and stopped struggling to fight back. They had to close their short positions in the RMB.

On Wednesday, January 1, around 11 a.m., Fang Hong suddenly updated a blog post on his personal social media account Weibo.

People outside found it very abrupt, but the more crucial point is that this Weibo post not only caused a sensation in the capital market, but also focused the attention of countless ordinary people in the country on the term "financial war".

The latest blog post by Fang Hong:
[From 2015 to now 2017, a battle to defend the RMB that lasted for two years has finally come to an end. From the aggressive international short-sellers to Yang Xing's counterattack, to the international short-sellers' comeback, they finally suffered heavy losses.

The national crackdown on illegal capital flight, moderate adjustments to the exchange rate system, and resolute counterattacks against international short sellers have finally and completely defeated the devaluation demon that lasted for two years. The RMB has finally emerged from the painful winter, and the new year will surely usher in a warm spring.

As for the hedge funds that had aggressively shorted the RMB, they all suffered disastrous defeat.

Looking back at the disputes in the foreign exchange market over the past two years, facing the crazy international short sellers and various doubts from both inside and outside the country, the most dangerous part is not the suppression of the RMB by international capital, but the panic among the people, the massive capital flight and many speculators trying to make profits by shorting the RMB.

Compared with the blatant enemies outside, the most terrifying thing is the people inside who are secretly causing trouble.

We need two guns, one to point at the enemy and the other to point at ourselves.

In this financial war that has lasted for two years, perhaps we have not done enough to improve our performance. However, amid internal and external turmoil, and in the face of a large number of ferocious international short sellers working together to hunt us, it is already a great achievement that we have been able to safeguard the country's economic development achievements over the past decades.

However, while celebrating the victory in the battle to defend the RMB, we must also be clear that it is far from over.

The pace of RMB internationalization will not stop because of the current difficulties and obstacles. As RMB goes global, I believe that the sniping war against RMB will continue.

The world is facing major changes unseen in a century, and the external environment may become more complex and changeable.

But no matter how the external environment changes, our most powerful and correct response will always be to do our own thing well.

My thoughts are so vast that they cover the whole universe, and I hear thunder in the silence. 】

……

When Fang Hong posted this Weibo post, it attracted a lot of attention and surprise from people from all walks of life.

Ordinary netizens did not expect that so many thrilling events had happened in the financial market in the past two years. Most people did not even feel anything, because these things are too far away and the threshold is too high for most ordinary people, but they are closely related to everyone and are deeply affected by them in tangible or intangible ways.

But there is one thing that the general public of netizens understands, that is, we have won this financial war that has lasted for two years!
The stock investors were also surprised. They have been exposed to the capital market and participated in it. They know more than those who do not trade stocks and are aware of some internal and external games in the financial market. But the difference this time is that a giant figure like Fang Hong spoke out directly in person, and the credibility and authority index was maxed out, which means that those big things really happened.

After Fang Hong published this Weibo post, some people were shocked and frightened when they saw it, especially because he bluntly said in the article that internal traitors are more terrifying than external enemies, and even said that he needed two guns, one pointing at external enemies and the other at himself.

It would be fine if others said so, but the existence of someone like Fang Hong is really scary.

Some people increasingly feel that they can no longer stay here, and they will be unable to sleep or eat unless they leave.

……

(End of this chapter)