The RMB exchange rate continues to strengthen! Goldman Sachs predicts it will rise to 6.85 by 2026, with internationalization entering the fast lane.

Recently, the performance of the RMB against the US dollar has been remarkable. As of November 26, the onshore USD/CNY exchange rate fell to 7.0824, and the offshore USD/CNH fell to 7.0779, both hitting new lows in over a year. Meanwhile, the CFETS RMB Exchange Rate Index rose to 98.22 on November 21, reaching its highest level since April this year.

What is driving this upward trend? First, the Federal Reserve’s easing cycle has created room for the RMB to appreciate; secondly, the People’s Bank of China’s proactive guidance on exchange rate management has also played a significant role. From the daily midpoint setting mechanism, the central bank continues to push the exchange rate higher through precise policy tools, with state-owned banks actively cooperating by frequently buying US dollars to stabilize fluctuations, steadily driving the exchange rate upward.

In comparison, the performance of other currency pairs such as RMB/AUD also reflects the overall strengthening trend of the RMB, demonstrating its relative advantage in the context of global diversification.

Strategic Intent Behind the Exchange Rate Appreciation

Kelvin Lam, Senior Economist at Pantheon Macroeconomics, pointed out that from a long-term perspective, China seems to be building an international credit foundation by demonstrating the stability of the RMB. This move recalls the historical episode during the 1998 Asian financial crisis, when the RMB refused to join the global devaluation race, thereby solidifying its regional anchor currency status.

Data best illustrates the point: in 2018, affected by US-China trade friction, the RMB depreciated by 5%; but by 2025, the RMB has appreciated by nearly 3%. This shift is no coincidence.

Accelerated Internationalization Process

Kiyong Seong, Chief Asia Macro Strategist at Société Générale, believes that in the current environment of increased global market volatility, the robustness and resilience demonstrated by the RMB provide strong support for the internationalization of the RMB.

The latest data from the Bank for International Settlements confirms this: compared to the previous survey in 2022, the daily average trading volume of USD/RMB has increased by nearly 60%, reaching 7.81 trillion USD, accounting for over 8% of the total global daily foreign exchange trading volume. This indicates that the activity of the RMB in international financial markets is rapidly increasing.

Goldman Sachs’s Forward-Looking Forecast

Goldman Sachs’s analysis team, based on current policy trends and economic fundamentals, has provided a clear appreciation roadmap: by the end of the year, the exchange rate is expected to reach the 1 USD to 7 RMB mark, and by 2026, the RMB against the USD could further appreciate to 6.85.

Most analysts agree that RMB internationalization has become a core policy priority for the Chinese government, and this process is expected to accelerate significantly in the coming years. From the strengthening of the exchange rate to surging trading volumes and increased international usage, the international competitiveness of the RMB is steadily improving.