The RMB continues to appreciate against the US dollar to 6.85! Goldman Sachs is optimistic, and the internationalization process is expected to accelerate.

Exchange rate hits a one-year low, with an obvious appreciation trend

Recently, the Chinese yuan has performed strongly, with the offshore USD/CNH dropping to 7.0779, and the onshore USD/CNY falling even further to 7.0824, both marking over a year’s low. This reflects the continued expansion of the yuan’s appreciation potential— as the Federal Reserve enters a rate-cutting cycle, this trend is expected to persist.

Official data more intuitively demonstrate this change. As of November 21, the CFETS RMB exchange rate index rose to 98.22, reaching its highest level since April this year. Compared to the 5% depreciation of the yuan during the 2018 trade friction period, the yuan is instead appreciating by nearly 3% in 2025, a significant shift.

Policy guidance and market resonance

The driving forces behind the yuan’s appreciation come from two levels. On one hand, the Fed’s rate cuts have released liquidity; on the other hand, the People’s Bank of China’s precise control over the exchange rate is even more noteworthy. The daily midpoint setting mechanism and the moderate purchase of dollars by state-owned banks are guiding the exchange rate to steadily rise. This “tangible hand” reflects official recognition of the yuan’s appreciation.

Industry insiders point out that this approach is reminiscent of the yuan’s performance during the 1998 Asian financial crisis—when the yuan refused to participate in a devaluation race. That move not only stabilized regional financial order but also laid the foundation for the yuan’s role as a regional reserve currency. Today’s appreciation strategy similarly aims at a strategic goal: to build credibility in the international financial markets by demonstrating the yuan’s resilience and stability.

Internationalization is no longer a distant goal but a reality

The most telling evidence comes from trading data. According to the Bank for International Settlements, since 2022, the daily trading volume of USD/CNY has increased by nearly 60%, now reaching $781 billion, accounting for over 8% of the total daily global foreign exchange trading. This indicates that the yuan’s position in international payments and reserves is rapidly rising.

Many international institutions believe that in such a stable and appreciating exchange rate environment, promoting the internationalization of the yuan is no longer a future issue but an ongoing process. Institutions like Société Générale see this appreciation cycle as an important window for expanding the yuan’s international influence.

Outlook: 6.85 is not the end

Goldman Sachs’s latest forecast provides a reference for the market. The bank’s analysts expect the USD/CNY to reach around 7.0 by the end of the year, and then further appreciate to 6.85 within the following year. This forecast is based on policymakers’ continued recognition of the yuan’s strong position and the view that internationalization has become a key official policy focus.

In other words, the story of the yuan’s appreciation is far from over. Under the combined influence of economic and non-economic factors, the process of yuan internationalization is expected to accelerate significantly in the coming years. During this process, the further rise of the USD/CNY exchange rate is only a surface phenomenon; what it truly reflects is China’s steadily expanding financial influence.