Renminbi reaches new strength heights! Goldman Sachs predicts: by 2026, the US dollar to RMB exchange rate may fall to 6.85

Recently, the performance of the Renminbi has been truly astonishing—onshore USD/RMB has fallen to 7.0824, while offshore USD/RMB has dropped even further to 7.0779, hitting a new low in over a year. What exactly is happening behind the scenes?

The Dual Drivers Behind the Strengthening Exchange Rate

The appreciation of the Renminbi may seem sudden, but there are clear signs pointing to it. The signals released by the Federal Reserve’s interest rate cut cycle cannot be ignored, but more importantly, deliberate guidance from Chinese policymakers is playing a key role.

The People’s Bank of China (PBOC) has been skillfully guiding the exchange rate upward within a daily midpoint setting, maintaining a fluctuation band of ±2%. Meanwhile, state-owned banks have frequently stepped in to buy US dollars. Although these measures may appear moderate, they are actually precise and effective. As of November 21, the CFETS Renminbi Exchange Rate Index has risen to 98.22, the highest level since April of this year.

Reshaping International Credibility

From a deeper strategic perspective, this wave of appreciation implicitly reflects China’s efforts to elevate its international financial standing. Kelvin Lam, senior economist at Pantheon Macroeconomics, believes that by demonstrating stability and strength of the Renminbi, China is reshaping global market confidence in the currency—bringing to mind the historic moments during the 1998 Asian financial crisis when the Renminbi held its ground amid waves of competitive devaluation.

During the 2018 trade war, the Renminbi depreciated by about 5%, but by 2025, it has appreciated by nearly 3%. This shift is highly significant. Kiyong Seong, Chief Asia Macro Strategist at Société Générale, pointed out that in today’s volatile global markets, the resilience and stability shown by the Renminbi are strong evidence of the ongoing process of internationalization.

Data Witnessing the Internationalization Process

The latest data from the Bank for International Settlements (BIS) provides quantitative evidence of the acceleration of Renminbi internationalization. Since the last survey in 2022, the daily trading volume of USD/RMB has surged nearly 60%, reaching $781 billion. Its share of total daily global foreign exchange trading has exceeded 8%—indicating that the Renminbi is becoming an increasingly important player in international transactions.

Goldman Sachs’ Future Outlook

Goldman Sachs’ analysis team is even more optimistic about the Renminbi’s prospects. Based on current policy tone and market trends, they expect the USD/RMB exchange rate to reach the psychological threshold of 7 by the end of the year, and to further strengthen to 6.85 by 2026.

This is not mere speculation but is grounded in in-depth analysis of China’s economic fundamentals, policy intentions, and the evolving international financial landscape. Goldman Sachs believes that the internationalization of the Renminbi has become a clear policy priority for the Chinese government, and significant acceleration is expected in the coming years.

For investors, the establishment of an RMB appreciation trend signals the beginning of a new wealth reallocation cycle.