Is the internationalization of the Renminbi becoming a certainty? Goldman Sachs forecasts appreciation to 6.85, experts interpret the strategic behind-the-scenes reasons

The story of the RMB appreciation has recently attracted market attention. According to the latest data from the Bank for International Settlements, since the 2022 survey, the average daily trading volume of the USD against the RMB has surged by nearly 60%, reaching 781 billion USD, accounting for more than 8% of the world’s total daily foreign exchange trading volume. Behind these figures reflects a significant rise in the international status of the RMB.

The Appreciation Trajectory Under Policy Guidance

In the past few months, the RMB’s appreciation has not been a spontaneous market phenomenon but a policy-driven outcome. The People’s Bank of China guides the exchange rate trend by setting the daily midpoint, while state-owned banks frequently buy US dollars to stabilize market fluctuations, allowing the exchange rate to steadily climb. As of November 26, the onshore USD/CNY fell to 7.0824, and the offshore USD/CNH fell to 7.0779, both hitting over a one-year low. More notably, the CFETS RMB Exchange Rate Index rose to 98.22 on November 21, reaching the highest level since April this year.

From Crisis Response to Strategic Initiative

Kelvin Lam, senior economist at Pantheon Macroeconomics, pointed out that from a strategic perspective, China seems to intentionally project a stable image of the RMB to build international credibility. This approach recalls the Asian financial crisis of 1998, when the RMB refused to join the wave of competitive devaluation, thereby establishing its position as a regional anchor currency. Today’s measures are, to some extent, a continuation of the successful experiences of past policies.

Kiyong Seong, Chief Asia Macro Strategist at Société Générale, believes: “Demonstrating the strength and stability of the RMB in turbulent market environments provides strong support for promoting the internationalization of the RMB.”

Appreciation Magnitude and Future Expectations

Looking at the historical context helps clarify the significance of this wave of appreciation. In 2018, due to the US-China trade war, the RMB depreciated by about 5%; however, by 2025, the RMB has appreciated nearly 3%, forming a stark contrast. The Federal Reserve’s gradual rate cuts have further opened up space for RMB appreciation.

Based on this trend, Goldman Sachs analysts forecast that by the end of the year, the exchange rate may reach 1 USD to 7 RMB, and in one year, it could continue to rise to 6.85 RMB. The institution believes that the internationalization of the RMB has become a key policy focus for the Chinese government and is expected to accelerate significantly in the coming years.

From a trading perspective, the essence of RMB appreciation has profound market implications. The continuous strengthening of the exchange rate not only reflects economic fundamentals but also represents the long-term policy planning regarding the RMB’s international status.