Goldman Sachs is optimistic about the RMB's appreciation potential: target price of 6.85 by 2026, with internationalization accelerating as a driving force

Recently, Goldman Sachs’ research team released a new report expressing optimism about the RMB’s appreciation prospects. The institution predicts that by 2026, the RMB against the US dollar could rise to 6.85, further appreciating from the current level. This judgment is based on the dual support of the Federal Reserve’s shift in monetary policy and the Chinese government’s promotion of RMB internationalization.

Current exchange rate hits over one-year low, clear upward trend

As of November 26, the USD/CNY onshore exchange rate was 7.0824, and the USD/CNH offshore rate was 7.0779, both hitting their lowest levels in over a year. This reflects a significant recent strength of the RMB.

The CFETS RMB Exchange Rate Index rose to 98.22 on November 21, reaching a new high since April this year. Behind the data, it not only shows the support of the Federal Reserve’s rate cut cycle for the RMB but also reflects the guiding role of the People’s Bank of China’s policies.

Dual drivers of RMB appreciation

The core drivers of RMB appreciation come from two aspects. First, the Federal Reserve entering a rate-cut cycle puts pressure on the US dollar, creating conditions for the RMB to appreciate. Second, the People’s Bank of China steadily guides the exchange rate higher by setting the daily midpoint, while state-owned banks frequently buy US dollars, effectively maintaining a stable upward trajectory of the exchange rate.

This orderly appreciation is not accidental. Strategically, by demonstrating stability and strength of the RMB, China is actively building international credibility. This approach echoes the performance of the RMB during the 1998 Asian financial crisis—when the RMB maintained its value without depreciation, consolidating its role as a regional anchor currency.

Kelvin Lam, senior economist at Pantheon Macroeconomics, pointed out that this is precisely China’s deliberate strategic layout for RMB internationalization.

Accelerating internationalization and significant growth in transaction volume

Progress in RMB internationalization can be glimpsed from trading data. The latest statistics from the Bank for International Settlements show that since the last survey in 2022, the daily trading volume of USD/RMB has increased by nearly 60%, reaching $781 billion, accounting for over 8% of total global daily foreign exchange trading. This figure fully demonstrates the growing attractiveness of the RMB as an international reserve currency.

Kiyong Seong, Chief Asia Macro Strategist at Société Générale, believes that in the context of global market volatility, the strength and stability shown by the RMB provide strong support for its internationalization process.

Historical comparison reinforces appreciation significance

Compared to historical trends, the significance of RMB appreciation becomes even more evident. In 2018, the RMB depreciated about 5% amid the US trade war, but since 2025, the RMB has appreciated nearly 3%. This shift fully reflects the stability of China’s economic fundamentals and policy coherence.

Goldman Sachs analysts stated that, based on a comprehensive assessment of economic and non-economic factors, RMB internationalization has become a key policy focus for the Chinese government and is expected to accelerate significantly in the coming years. Against this backdrop, the target price of 6.85 for USD/RMB is gradually becoming a realistic possibility.