The RMB to USD exchange rate hits a new high! Goldman Sachs predicts it will rise to 6.85 by 2026, strengthening its international status.

Exchange Rate Hits Record High, RMB Appreciation Becomes Market Focus

Recently, the RMB has performed strongly, with the onshore USD/CNY falling to 7.0824 and the offshore USD/CNH dropping to 7.0779, both hitting over a one-year low. As an important indicator of the overall trend of the RMB, the CFETS RMB Exchange Rate Index rose to 98.22 on November 21, reaching its highest level since April this year.

Behind this round of appreciation, there are both external factors driving it and proactive policy arrangements. The Federal Reserve’s gradual rate cuts have created room for RMB appreciation, while domestic policy guidance has accelerated this process.

Precise Central Bank Regulation, RMB Appreciation Is Not Accidental

The steady progress of RMB appreciation reflects the conscious policy orientation of the central bank. Data shows that the daily midpoint set by the People’s Bank of China (PBOC) has continuously guided the exchange rate upward, while state-owned banks frequently buy USD to maintain exchange rate stability, ultimately forming a stable and resolute appreciation trend.

From a deeper strategic perspective, China seems to be shaping a strong image for the RMB through this wave of appreciation. Kelvin Lam, senior economist at Pantheon Macroeconomics, pointed out that this move recalls the history of 1998 during the Asian Financial Crisis, when the RMB actively resisted competitive devaluation and strengthened its regional anchor status. The current appreciation direction is precisely about conveying the credibility and stability of the RMB to the international market.

RMB Internationalization: From Policy Intentions to Market Reality

Looking at history, the significance of RMB appreciation is extraordinary. In 2018, affected by the US trade war, the RMB depreciated by about 5%; but by 2025, the RMB has appreciated nearly 3% against the trend. This shift not only reflects improvements in economic fundamentals but also demonstrates strategic policy adjustments.

Kiyong Seong, Chief Asia Macro Strategist at Société Générale, believes that demonstrating the RMB’s strong stance in a complex international market environment provides strong support for the internationalization of the RMB. The latest data from the Bank for International Settlements confirms this trend: since 2022, the daily trading volume of USD/RMB has increased by nearly 60%, reaching a scale of $781 billion, accounting for over 8% of global foreign exchange trading. This indicates that more and more international capital is choosing to settle and invest in RMB.

Goldman Sachs Forecast: Appreciation Momentum to Continue

Looking ahead, Goldman Sachs analysts remain optimistic about RMB appreciation. Based on current positive policy signals and economic fundamentals, Goldman Sachs expects the USD/RMB exchange rate to reach around 7.0 by the end of the year, and to continue rising to 6.85 within a year.

The logic behind this forecast is that RMB internationalization has become a key policy focus of the Chinese government. Through orderly appreciation, demonstrating stability, and expanding trading volume, the international status of the RMB is expected to significantly improve in the coming years, further encouraging more multinational companies and investment institutions to settle transactions in RMB.