The appreciation of the RMB accelerates the internationalization process; Goldman Sachs predicts it may reach the 6.85 level by 2026.

Exchange Rate Strengths Upward, Signaling Internationalization

In recent months, the RMB has performed exceptionally well. As of November 26, USD to onshore RMB(USD/CNY) fell to 7.0824, and USD to offshore RMB(USD/CNH) dropped to 7.0779, both hitting new lows not seen in over a year. Earlier, on November 21, the CFETS RMB Exchange Rate Index rose to 98.22, the highest since April 2025. This round of appreciation is no coincidence—the Federal Reserve’s gradual rate cuts have created room for RMB appreciation, but the deeper driving force comes from proactive policy guidance.

Central Bank Policies and Market Forces Drive Appreciation

Behind the steady rise of the RMB, the daily setting of the midpoint (the spot exchange rate fluctuating within 2% around the midpoint) by the central bank continues to guide the exchange rate upward. Meanwhile, state-owned banks frequently buy USD, effectively limiting sharp fluctuations and ensuring a smooth appreciation process. Behind this precise operation lies a clear strategic intent: to demonstrate RMB stability and build international credibility.

This recalls the measures taken during the 1998 Asian financial crisis, when the RMB refused to join the wave of competitive devaluation—an action that solidified RMB’s role as a regional anchor currency. Today, this historical logic is being replayed, but the context has shifted from defense to offense.

Strategic Shift in Appreciation: From Passive Devaluation to Active Appreciation

The contrast is striking: in 2018, amid the US trade war, the RMB depreciated by about 5%. By 2025, the RMB has appreciated by nearly 3%. This is not just a change in exchange rate figures but a 180-degree shift in monetary policy thinking.

Analysts believe that demonstrating RMB strength and stability amid turbulent global markets is a powerful support for RMB internationalization. The latest data from the Bank for International Settlements shows that since the last survey in 2022, the daily trading volume of USD to RMB has increased by nearly 60% to $781 billion, accounting for over 8% of global daily foreign exchange trading. This indicates that RMB’s attractiveness in international transactions is growing daily.

Expansion of Internationalization and Multi-Currency System Formation

RMB appreciation is not limited to the USD. In the broader push for internationalization, the RMB’s exchange rate systems against major currencies like the euro and yen are also being improved, indicating that RMB is moving toward becoming a true international reserve currency. The deepening of cross-rates such as RMB-Euro will further strengthen RMB’s role as a hub in the global financial system.

Goldman Sachs Outlook: Continued Exchange Rate Rise

Goldman Sachs analysts provide a clear direction for the market. Given the authorities’ explicit recognition of the RMB’s strong trend, they expect the exchange rate to reach 1 USD to 7 RMB by the end of the year, with further appreciation to 6.85 RMB in 2026. This forecast is not based solely on technical analysis but on a deep understanding of China’s policy direction—RMB internationalization has become a key policy focus, and significant acceleration is expected in the coming years.

In other words, the current wave of appreciation is just the beginning; the true path of internationalization has only just begun.