Goldman Sachs Latest Forecast Sparks Wave: RMB Appreciation Potential Expands Further, Target Reaches 6.85 Next Year

The RMB appreciation wave continues to intensify. Recently, Goldman Sachs' analysis team published a forward-looking perspective, stating that under the backdrop of the Federal Reserve gradually adjusting interest rates, the momentum of RMB's appreciation against the US dollar will be further unleashed. Analysts expect that by the end of the year, the exchange rate may reach the psychological level of 1 USD to 7 RMB, and within the next year, it will further strengthen to 6.85.

**Exchange Rate Appreciation Becomes Reality, Market Signals Are Clear**

Recent RMB appreciation movements are not just talk. As of November 26, the onshore USD/CNY has fallen to 7.0824, and the offshore USD/CNH has dropped to 7.0779, both hitting lows not seen in over a year. More notably, the CFETS RMB exchange rate index rose to 98.22 on November 21, reaching its highest level since April this year. These data points fully reflect the RMB's strong performance in the international market.

**Central Bank Policies and Market Resonance Drive Appreciation**

There are multiple factors behind the RMB's appreciation. First, the Federal Reserve's easing cycle has created room for RMB appreciation; second, domestic policy orientation is actively guiding the exchange rate upward. The People's Bank of China’s daily setting of the midpoint (the onshore exchange rate fluctuates within 2% above and below the midpoint) continues to guide the exchange rate higher. State-owned banks frequently buy US dollars to stabilize fluctuations, and these two forces work together, enabling the RMB to steadily climb.

Kelvin Lam, senior economist at Pantheon Macroeconomics, pointed out that from a strategic perspective, Chinese authorities seem intent on establishing international credibility through a stable and strong RMB image. This logic is not new; during the Asian financial crisis in 1998, the RMB refused to follow other currencies into a depreciation race, thereby consolidating its role as a regional anchor currency.

**Internationalization Accelerates, Trading Volumes Surge**

Another deeper meaning behind RMB appreciation is its internationalization progress. Compared to the 2018 US-China trade war period when the RMB depreciated by about 5%, it has now appreciated by nearly 3%, reflecting a significant policy shift.

Kiyong Seong, chief Asian macro strategist at Société Générale, emphasized that demonstrating resilience and stability of the RMB amid market volatility provides strong support for advancing RMB internationalization. The latest data from the Bank for International Settlements also confirms this—since the last survey in 2022, the daily average trading volume of USD/RMB has increased by nearly 60%, reaching 781 billion USD, accounting for over 8% of the total daily global foreign exchange trading volume.

**Clear Policy Focus, Appreciation Trend Likely to Continue**

Goldman Sachs' analysis team further pointed out that given the authorities’ recognition of the RMB appreciation trend, it can be reasonably inferred that RMB internationalization has become a key policy direction for the Chinese government. Based on a comprehensive assessment of economic and non-economic factors, the RMB appreciation process is expected to accelerate significantly in the coming years. This not only reflects firm policy determination but also indicates that the importance of the RMB on the international stage will further increase.