The appreciation of the Renminbi witnesses the acceleration of internationalization! Goldman Sachs predicts that the USD/RMB exchange rate will rise to 6.85 by 2026.

Recently, the Renminbi has been on full throttle, with a very strong appreciation trend. As of the end of November, the USD to onshore RMB exchange rate has fallen to 7.0824, and offshore also dropped to 7.0779, both hitting new lows in over a year. The story behind this deserves careful analysis — RMB appreciation is not just a simple exchange rate fluctuation, but an important signal of China promoting the internationalization of the RMB.

Strategic Intent Behind the Appreciation

Why has the RMB been so strong recently? On the surface, it appears to be due to the Federal Reserve starting a rate cut cycle, weakening the dollar. But the deeper reason lies in the fact that China’s central bank is intentionally guiding the RMB to appreciate. The daily fixing rate set by the People’s Bank of China has been consistently rising, and state-owned banks are frequently buying US dollars to stabilize the exchange rate. Behind this “tangible hand” operation is the desire to demonstrate the RMB’s stability to the international market.

This reminds one of the scene during the 1998 Asian financial crisis. At that time, many Asian currencies collapsed under downward pressure, but the RMB remained resilient, giving the RMB an image of a “reliable anchor.” Today, China is using the same logic — showing strength and stability through RMB appreciation, paving the way for internationalization.

From Trade War to Appreciation Trend: A Clear Shift

Data speaks volumes. During the US-China trade war in 2018, the RMB suffered quite a bit, depreciating about 5% for the year. But by 2025, the RMB appreciated nearly 3%. This stark contrast directly indicates a fundamental shift in policy attitude — from passive depreciation in response to pressure to active appreciation to demonstrate strength.

The chief Asia macro strategist at Société Générale pointed out that in uncertain market environments, showing the RMB’s strength and stability is precisely the strongest evidence of promoting RMB internationalization. In simple terms, no one wants an unstable, consistently depreciating currency for international transactions.

What Does the USD to RMB Appreciation Reflect?

From a trading volume perspective, the USD to RMB market is clearly heating up. Data from the Bank for International Settlements shows that since 2022, the daily trading volume of USD against RMB has surged nearly 60%, reaching $781 billion, accounting for over 8% of the total global daily foreign exchange trading volume. This indicates that more and more international institutions and investors are investing more in the USD-RMB exchange rate, and the international acceptance of the RMB is rising.

Meanwhile, the CFETS RMB exchange rate index rose to 98.22 on November 21, hitting a new high since April this year. This index reflects the strength of the RMB relative to a basket of currencies; the higher the number, the more stable the RMB’s position in the international market.

Goldman Sachs’ Forecast: A New High of 6.85

Goldman Sachs’ analytical team has a clear view. They believe that based on current policy orientation and economic fundamentals, the USD to RMB exchange rate is expected to reach 1 USD to 7 yuan by the end of the year, and further appreciate to 6.85 yuan in one year. This means there is still significant room for RMB appreciation against the dollar.

More importantly, Goldman Sachs emphasizes that RMB internationalization has become a core policy focus of the Chinese government. In the coming years, this process is expected to accelerate significantly. Simply put, the goal of making the RMB a true international reserve and trading currency is getting closer.

Summary

RMB appreciation is not an isolated exchange rate fluctuation but a deep international strategy unfolding. Demonstrating stability through appreciation, attracting international users through stability, and promoting internationalization through usage — this is the “trilogy” that the People’s Bank of China and the government are executing. Against the backdrop of Federal Reserve rate cuts and a weakening dollar, the target of RMB reaching 6.85 may no longer be just a hopeful vision.