The internationalization of the RMB enters the fast lane, and there is a deeper meaning behind the strong exchange rate

Recently, the Chinese Renminbi has truly “stirred” up. As of November 26, the onshore USD/CNY exchange rate fell to 7.0824, and the offshore USD/CNY also dropped to 7.0779, both hitting over a one-year low. Behind this trend, it not only reflects the expectations change brought by the Federal Reserve’s rate cuts but also indicates China’s policy orientation to promote the internationalization of the Renminbi.

Strong Appreciation in Exchange Rate, Internationalization as the Main Theme

Let’s look at the data first. The CFETS Renminbi Exchange Rate Index rose to 98.22 on November 21, reaching its highest point since April this year. In stark contrast to the approximately 5% depreciation of the Renminbi during the 2018 US-China trade war, the Renminbi appreciated by nearly 3% in 2025—this reversal itself signals a significant shift.

The latest survey data from the Bank for International Settlements (BIS) is even more revealing: since 2022, the daily trading volume of USD/CNY has increased by nearly 60%, reaching $781 billion, accounting for over 8% of the total global daily foreign exchange trading volume. This is not just a numerical increase but a direct reflection of the growing weight of the Renminbi in international markets.

Policy Signals, Appreciation Potential Opens Up

Renminbi appreciation is never accidental. The People’s Bank of China (PBOC) sets the daily midpoint rate to guide the exchange rate higher continuously, while state-owned banks frequently buy US dollars to stabilize currency fluctuations, indicating that policy-level efforts are being systematically advanced. From a broader perspective, this approach is very similar to the strategy during the 1998 Asian financial crisis, when the Renminbi refused to engage in competitive devaluation and established regional anchor status—restraint then earned long-term international credibility.

Kiyong Seong, Chief Asia Macro Strategist at Société Générale, pointed out that demonstrating the Renminbi’s strength and stability amid global market turbulence provides strong support for promoting its internationalization. This is not purely an economic issue but also a strategic layout.

Bright Outlook, Goldman Sachs Offers Clear Predictions

Market expectations are also adjusting. Based on current policy orientation and economic fundamentals, Goldman Sachs analysts forecast that by the end of the year, the exchange rate will reach 1 USD to 7 RMB, and in one year, it will further appreciate to 6.85 RMB. They explicitly state that the internationalization of the Renminbi has become an important policy goal of the Chinese government, and it is expected to accelerate significantly in the coming years.

From an investment perspective, what does this mean? For overseas investors, the Renminbi’s appreciation makes Chinese assets priced in dollars more attractive; for market participants holding US dollars, it requires reassessing currency allocations. In the long run, the faster the Renminbi internationalizes, the more important its role will be in the global financial system.

The Federal Reserve’s rate cut cycle has just begun, and the space for Renminbi appreciation remains open. This wave of appreciation is not just a movement in exchange rate figures but a reflection of a major economic power rising in the international stage.