Is the internationalization of the RMB accelerating? Goldman Sachs predicts the USD to RMB exchange rate will reach 7 within the year and rise to 6.85 next year.

Exchange Rate Bottoming Out, RMB Internationalization Becomes Policy Focus

In recent months, the trend of the RMB against the US dollar has become a market focal point. Goldman Sachs’s latest outlook provides a clear expectation: by the end of the year, the USD to RMB exchange rate will reach the key psychological level of 1:7, and by 2026, it will further appreciate to 1:6.85. Behind this forecast reflects the Chinese authorities’ firm commitment to promoting RMB internationalization.

Data Reveals the Deep Logic Behind Exchange Rate Changes

Looking at specific data, this round of appreciation momentum is quite solid. The CFETS RMB Exchange Rate Index hit a new high for the year in November (98.22), while USD onshore RMB (USD/CNY) and offshore RMB (USD/CNH) both fell below 7.08, hitting a more than one-year low. This market performance is no coincidence.

The People’s Bank of China’s daily adjustments to the midpoint rate continue to guide it upward, while state-owned banks frequently intervene in the USD market to balance operations. These two forces jointly promote the steady appreciation of the RMB. Kiyong Seong, Chief Asia Macro Strategist at Société Générale, believes that amid increasing global market volatility, the strength and stability demonstrated by the RMB are the most compelling proof of its internationalization process.

The Dual Drivers Behind the Appreciation

There are two main factors supporting the downward trend of the USD to RMB exchange rate. First, the Federal Reserve’s continued rate cuts have created room, making dollar-denominated assets less attractive. Second, from a strategic perspective, China aims to build international credibility through the steady performance of the RMB. Kelvin Lam, Senior Economist at Pantheon Macroeconomics, points out that this approach has strategic implications reminiscent of the 1998 Asian financial crisis—when the RMB refused to devalue and ultimately established itself as a regional anchor currency.

Tangible Progress in Internationalization

The results of RMB internationalization are beginning to show in data. The latest survey from the Bank for International Settlements indicates that the daily trading volume of USD to RMB has increased by nearly 60% to $7.81 trillion, accounting for over 8% of the total global foreign exchange daily trading volume. This growth rate shows that more and more international participants are willing to trade amid USD-RMB fluctuations.

Comparing historical data highlights the significance of these changes: during the 2018 trade war, the RMB depreciated by about 5%, but by 2025, it has appreciated by nearly 3%. The reversal of direction in itself is a story.

Market Implications

Goldman Sachs analysts point out that, given the authorities’ support for a strong RMB trend, RMB internationalization has become a policy focus for the coming years, with the pace of promotion expected to accelerate significantly. The weakening of the USD against the RMB is the most direct manifestation of this major trend.