The RMB to USD exchange rate hits a new annual high, with Goldman Sachs predicting it will rise to 6.85 by 2026.

The start of the Federal Reserve’s rate cut cycle is driving up the international appeal of the Renminbi. As of November 26, the USD to RMB exchange rate fell to 7.0824 (onshore), and the USD to offshore RMB (USD/CNH) also declined to 7.0779, both hitting new lows in a year.

More notably, the CFETS Renminbi Exchange Rate Index reached 98.22 on November 21, the highest point since April this year. This reflects not only short-term exchange rate fluctuations but also deeper policy orientation changes.

Official Guidance + Market Forces, Clear Logic in Renminbi Trends

The continued strengthening of the RMB against the US dollar stems from the combined efforts of two forces. First, the Federal Reserve’s move into a rate cut cycle has created external conditions for RMB appreciation; second, domestic policy measures are intentionally guiding the currency to appreciate.

The People’s Bank of China (PBOC) controls exchange rate fluctuations within a 2% band by setting the daily midpoint, forming a steady appreciation trend. Meanwhile, state-owned banks frequently buy US dollars, further limiting sharp exchange rate volatility. The effectiveness of this combined approach is evident—the RMB against the USD is steadily rising.

Kelvin Lam, Senior Economist at Pantheon Macroeconomics, offers insightful commentary: “From a macro strategic perspective, China seems to be reinforcing its international credibility by demonstrating the stability of the RMB. This approach reminds us of the period during the 1998 Asian financial crisis when the RMB refused to devalue and maintained its regional currency position.”

Sharp Contrast: From Depreciation Pressure to Appreciation Trend

The longer the time span, the more pronounced the RMB exchange rate shift. In 2018, amid trade friction pressures, the RMB depreciated by about 5%; by 2025, however, the RMB has appreciated nearly 3% against the trend. This stark contrast reflects a fundamental change in policy orientation.

Kiyong Seong, Chief Asia Macro Strategist at Société Générale, points out that amid increasing volatility in global financial markets, the RMB’s strength and resilience have become a powerful support for its internationalization process.

Data supports this assessment. The latest statistics from the Bank for International Settlements show that since 2022, the daily average trading volume of USD against RMB has increased by nearly 60%, reaching $781 billion, accounting for over 8% of total daily global foreign exchange trading. This indicates a rapid increase in RMB trading activity in international markets.

Goldman Sachs Forecast: 2026 Exchange Rate Target Anchored at 6.85

Goldman Sachs’ analysis team, based on their understanding of current policy trends, provides a clear exchange rate outlook. They believe that with official recognition of the RMB’s strengthening trend, the USD to RMB exchange rate could reach 7.0 before the end of the year, and further appreciate to 6.85 by 2026.

“From a macroeconomic and policy perspective, RMB internationalization has become a strategic priority for the Chinese government, and this process is expected to accelerate significantly in the coming years,” Goldman Sachs stated. This is not just a numerical change in the exchange rate but a profound adjustment in the role of the RMB within the global financial system.