The RMB continues to strengthen against the US dollar: internationalization accelerates, Goldman Sachs forecasts a target price of 6.85 by 2026.

Goldman Sachs’ latest research indicates that, benefiting from the Federal Reserve’s easing policy environment, the RMB’s appreciation against the US dollar will continue. The institution forecasts that by the end of the year, the USD/RMB will dip to the 7.00 level, and after 2026, further depreciate to 6.85, reflecting the accelerated advancement of the RMB internationalization strategy.

Exchange Rate Hits Record High, Strong Appreciation Momentum

Data shows a clear RMB appreciation trend. The CFETS RMB Exchange Rate Index broke through 98.22 on November 21, reaching a yearly high. Specifically, the onshore USD/CNY is currently at 7.0824, and the offshore USD/CNH is at 7.0779, both hitting over one-year lows.

This shift is markedly different from the past. During the 2018 trade friction period, the RMB depreciated by about 5%, whereas this year it has appreciated by nearly 3%, highlighting a stark contrast.

Policy Guidance and Stable Expectations Coexist

The strong performance of the RMB against the US dollar is not accidental. The People’s Bank of China guides the exchange rate by setting the daily midpoint, allowing the spot rate to fluctuate within a 2% band around the midpoint, with the overall direction pointing toward appreciation. Meanwhile, the frequency of state-owned banks buying US dollars has increased, further consolidating the steady upward trend of the exchange rate.

Kelvin Lam, senior economist at Pantheon Macroeconomics, points out that Chinese authorities are reinforcing international credibility by demonstrating RMB stability. This strategic approach is comparable to the measures taken during the 1998 Asian financial crisis, where the RMB refused to engage in competitive devaluation, thereby establishing its regional anchor currency status.

International Recognition Grows, Trading Volume Surges

The international status of the RMB against the US dollar is rising. According to data from the Bank for International Settlements, since the last survey in 2022, the daily average trading volume of USD/RMB has increased by nearly 60%, reaching $7.81 trillion, accounting for over 8% of global foreign exchange trading.

Kiyong Seong, chief Asian macro strategist at Société Générale, believes that amid increasing market volatility, the RMB’s strength and stability demonstrate its internationalization process, injecting strong momentum into its global integration.

Accelerated Internationalization Becomes Policy Focus

Goldman Sachs analysts further note that, based on a comprehensive assessment of current economic and non-economic factors, RMB internationalization has become a core policy orientation of the Chinese government. Driven by policy support and market demand, the degree of RMB internationalization against the US dollar is expected to make significant progress in the coming years, deepening RMB’s influence within the global financial system.