Renminbi appreciates to new heights! Goldman Sachs expects it to reach 6.85 against the US dollar by 2026, with the internationalization process accelerating.

Exchange rate hits a new high for the period, why is the RMB strengthening?

Recently, the performance of the RMB has been remarkable. 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 the lowest levels in over a year. On November 21, the CFETS RMB Exchange Rate Index rose to 98.22, reaching the highest point since April this year. What underlying logic is behind this strong upward movement?

Dual drivers: central bank guidance and Federal Reserve rate cuts

RMB appreciation is not accidental. From the central bank’s perspective, the People’s Bank of China (PBOC) has been guiding the exchange rate higher by setting the daily midpoint. Meanwhile, state-owned banks have frequently bought USD to stabilize currency fluctuations. These actions have steadily pushed the RMB exchange rate upward. The macro backdrop is the Federal Reserve’s gradual rate cuts, which have created more room for RMB appreciation.

Kiyong Seong, Chief Asia Macro Strategist at Société Générale, pointed out that demonstrating RMB stability and strength in a volatile market environment provides important support for promoting RMB internationalization. This is not just simple currency fluctuation but a strategic and deliberate monetary policy play.

International status rising, trading volume hitting new highs

Data best illustrates the point. According to the latest statistics from the Bank for International Settlements, since the last survey in 2022, the daily trading volume of USD/RMB has increased by nearly 60%, now reaching $781 billion, accounting for over 8% of total global daily foreign exchange trading. This indicates that RMB’s influence in the international forex market is rapidly increasing.

Meanwhile, the RMB against the euro also warrants attention, further reflecting the progress of RMB internationalization. Since 2025, the RMB has appreciated by nearly 3%, a stark contrast to the 5% depreciation caused by the US-China trade war in 2018, demonstrating a clear policy shift.

Historical comparison: memories of the 1998 Asian financial crisis

Some analysts believe that the current policy logic is similar to that during the 1998 Asian financial crisis. At that time, the RMB refused to participate in the competitive devaluation wave, thereby consolidating its status as a regional anchor currency. Today, by demonstrating RMB stability to build international credibility, this strategic approach remains clear.

Goldman Sachs outlook: expected to reach 6.85 by 2026

What are market expectations for the future? Goldman Sachs analysts have provided specific forecasts. Given the authorities’ recognition of the RMB’s strong trend, it is expected that the exchange rate will reach 1 USD to 7 RMB by the end of the year, and potentially continue to rise to 6.85 within a year.

A deeper judgment is that, based on economic and non-economic factors, RMB internationalization has become a clear policy priority for the Chinese government. In the coming years, this process is likely to accelerate significantly, which will have profound impacts on the global financial landscape. For traders, this is both a risk warning and an opportunity.