The RMB against the US dollar hits a new annual high! Goldman Sachs forecasts it will rise to 6.85 by 2026, accelerating the internationalization process.

Exchange Rate Innovation, Clear Market Signals

Recently, the RMB appreciation trend has been particularly eye-catching. As of November 26, the USD onshore RMB (USD/CNY) fell to 7.0824, and the USD offshore RMB (USD/CNH) fell to 7.0779, both hitting over a one-year low. This is not just a numerical change but also reflects China’s strategic adjustments in monetary policy.

The CFETS RMB Exchange Rate Index rose to 98.22 on November 21, reaching its highest point since April this year. Behind these data is the Federal Reserve’s easing cycle, along with careful domestic policy guidance.

Policy Synergy Drives Appreciation

For months, the People’s Bank of China has continuously guided the RMB to strengthen through daily midpoint setting (keeping the spot rate within a 2% fluctuation range). Meanwhile, state-owned banks frequently buy US dollars in the foreign exchange market to stabilize fluctuations, forming a steady upward trend.

Behind this policy combination lies a deeper strategic goal. Kiyong Seong, Chief Asia Macro Strategist at Société Générale, pointed out that in the context of global market volatility, demonstrating the RMB’s stability and resilience is a key move to promote RMB internationalization.

Kelvin Lam, Senior Economist at Pantheon Macroeconomics, compared this to the history during the 1998 Asian financial crisis. At that time, the RMB refused to participate in a devaluation race, consolidating its status as a regional anchor currency. Today, China seems to be replicating this strategic logic—by showcasing the RMB’s strength and stability, it aims to build greater international credibility.

Historical Benchmarking, Significant Appreciation

Compared to 2018, when the RMB depreciated about 5% due to the US trade war, the RMB has appreciated nearly 3% by 2025. This turning point signifies a fundamental change in policy attitude.

The latest data from the Bank for International Settlements further confirms the global influence of this trend. Since 2022, the daily trading volume of USD to RMB has increased by nearly 60%, reaching $781 billion, accounting for over 8% of total global daily foreign exchange trading. This indicates that RMB appreciation against the USD is not an isolated phenomenon but an important change within the international financial system.

Goldman Sachs Outlook: Broad Appreciation Potential

Goldman Sachs analysts have provided a clear forecast for the RMB’s future performance. Given the authorities’ recognition of RMB appreciation, it is expected that by the end of the year, the exchange rate will reach 1 USD to 7 RMB, and by the end of next year, the RMB against the USD may continue to appreciate to 6.85.

Analysts emphasize that this forecast is based on a comprehensive consideration of economic and non-economic factors. RMB internationalization has become a core policy focus of the Chinese government, and this process is expected to accelerate significantly in the coming years. This is not only about exchange rate data but also reflects China’s rising status in the global financial system and the continuous strengthening of the RMB as an international reserve currency.