Renminbi Shines on the International Stage: The Big Game Behind the Appreciation, Can It Break 6.85 in 2026?

Recently, the Chinese Renminbi has been behaving a bit “differently.” As of November 26, the USD to offshore RMB exchange rate fell to 7.0779, hitting a new low in over a year. Meanwhile, the CFETS RMB Exchange Rate Index has risen to 98.22, the highest level since April this year. These seemingly normal fluctuations conceal deeper policy intentions.

What has the central bank been doing behind the scenes?

A careful look at the recent exchange rate trends reveals that RMB appreciation is not a spontaneous market choice but a guided, orderly policy move. The daily midpoint set by the People’s Bank of China (allowing a 2% fluctuation around this rate) has been steadily rising, and state-owned banks have been frequently buying US dollars. Under these combined operations, the RMB has been steadily climbing.

Behind this deliberate appreciation lies an important signal from the Chinese government: by demonstrating the stability and strength of the RMB, it aims to build international credibility. This recalls the history during the 1998 Asian financial crisis when the RMB refused to devalue along with others, thereby establishing its regional anchor currency status.

The true driving force behind the appreciation

Of course, RMB appreciation is not without cause. The Federal Reserve’s rate-cut cycle has laid the groundwork—when the dollar gradually weakens, other currencies’ appreciation potential opens up. Major international currencies like the Australian dollar and euro have also risen during this cycle, but the RMB’s performance is particularly noteworthy.

More importantly, China is consciously guiding this trend. This is reflected not only in the central bank’s policy operations but also in the long-term strategic planning implied by this choice—RMB internationalization has quietly become a policy priority.

What do international markets think?

The views of international financial institutions confirm this shift. Data from the Bank for International Settlements show that since 2022, the daily trading volume of USD to RMB has surged by nearly 60%, now reaching $781 billion, accounting for over 8% of the total global foreign exchange daily trading volume. This indicates that international markets are actively participating in RMB internationalization.

The chief Asia macro strategist at Société Générale pointed out that in the context of global market turbulence, the RMB’s strength and stability provide strong support for its internationalization. This stability itself is a sign of a hard currency.

Comparing with the Federal Reserve’s logic

The phenomenon of RMB appreciation is particularly interesting when compared historically. In 2018, amid the US-China trade war, the RMB depreciated by about 5%. But by 2025, the RMB has appreciated by nearly 3%. This is not just a numerical comparison but also a shift in policy logic—from passive response to proactive shaping.

Goldman Sachs’s forecast path

Market expectations for the RMB outlook are also warming. Goldman Sachs analysts predict that by the end of the year, the USD to RMB exchange rate will reach 7.0 (i.e., 1 USD to 7 RMB), and by 2026, it will further strengthen to 6.85. This means an appreciation of nearly 3% within just over a year.

According to Goldman Sachs, based on a comprehensive assessment of economic and non-economic factors, RMB internationalization has become a priority policy direction for the Chinese government. In the coming years, this process is expected to accelerate significantly. Both the growth in trading volume and international recognition are paving the way for this goal.

Insights for market participants

For investors and market participants, RMB appreciation against the USD has profound structural significance. It not only reflects short-term exchange rate fluctuations but also signals a quiet shift in RMB’s role within the international financial system. At a time when currencies like the Australian dollar and euro are also facing structural challenges, the RMB’s appreciation trend stands out even more.

In the coming years, if Goldman Sachs’s forecasts and the central bank’s policy intentions proceed as planned, the acceleration of RMB internationalization will not only change exchange rates but also reshape the global financial landscape and the RMB’s position within it.