RMB internationalization accelerates: Federal Reserve rate cuts and policy efforts boost the exchange rate, Goldman Sachs optimistic about breaking the 7 mark by 2026

Amid the Federal Reserve’s continued rate cuts, the RMB exchange rate has shown a strong appreciation trend. Especially driven by changes in the political landscape of the US presidential election, the global capital flow pattern has adjusted, and the attractiveness of the RMB as an emerging market currency continues to increase.

Exchange Rate Data Reveals Deep Policy Intentions

As of November 26, the USD onshore RMB (USD/CNY) quote was 7.0824, and the USD offshore RMB (USD/CNH) quote was 7.0779, both hitting new lows not seen in over a year. Meanwhile, the RMB exchange rate index (CFETS) rose to 98.22 on November 21, reaching its highest point since April this year. Behind these figures reflects the clear stance of the central bank — RMB appreciation has become an established policy direction.

For months, the central bank has guided the daily midpoint with precision (controlling daily fluctuations within ±2%), combined with state-owned banks’ USD purchase operations, resulting in a steady upward trend in the RMB exchange rate. This carefully designed market intervention is not merely a simple exchange rate adjustment but a strategic layout.

Internationalization Background: A Historical Benchmark from 1998 to 2025

Kelvin Lam, senior economist at Pantheon Macroeconomics, pointed out that this operational logic directly targets the goal of RMB internationalization. During the Asian financial crisis in 1998, the firm choice of the RMB not to devalue established its position as a regional anchor currency. Today, as the Federal Reserve enters a cycle of rate cuts and the US election landscape reshapes, China is sending a clear signal to the global market by demonstrating RMB stability and resilience in appreciation: the RMB is trustworthy.

Kiyong Seong, head of Asia macro strategy at Société Générale, believes that in the current environment of increasing global economic uncertainty, the strong performance of the RMB itself is the best proof of its internationalization process.

Market Scale Expansion Validates International Acceptance

The latest data from the Bank for International Settlements provides strong support. Since the previous survey in 2022, the daily trading volume of RMB against USD has increased by nearly 60%, reaching a scale of $781 billion, accounting for over 8% of total global daily foreign exchange trading. This indicates that more and more international investors and trading institutions are incorporating RMB into their trading portfolios.

Goldman Sachs Forecast: Appreciation Path Is Clear

Goldman Sachs analysts stated that based on current policy orientation and market response, the exchange rate by the end of the year will approach 1 USD to 7 RMB, and by 2026, it is expected to further appreciate to around 6.85. The analysts emphasize that this appreciation is not a short-term fluctuation but reflects China’s long-term policy tendency — accelerating RMB internationalization amid global economic changes and enhancing its status in the international reserve currency system.

The path of RMB internationalization has shifted from idealism to reality. Every rise in the exchange rate sends a message to the world: China’s economy is resilient, and the prospects for the RMB are promising.