Will the RMB still appreciate in 2026? The calculation of converting USD to RMB needs to be clear.

Recently, the RMB exchange rate has become a hot topic of discussion. On December 25th, the USD/CNH (offshore RMB) fell to 6.9965, the lowest since September last year, while the onshore RMB (USD/CNY) also dropped to 7.0051—its strongest level since May 2023.

What are the driving forces behind this round of appreciation?

The recent strengthening of the RMB is not accidental; at least three factors are contributing:

First is the weakening of the US dollar itself. Under the continuous rate cuts by the Federal Reserve and the global de-dollarization trend, the US dollar index has fallen over 10% this year, with a decline of more than 2% in the past month. The depreciation pressure of the dollar against the RMB has consequently increased.

Second is policy support. The People’s Bank of China has continuously raised the midpoint of the RMB exchange rate throughout the year, effectively guiding the RMB to appreciate and sending a clear policy signal.

Additionally, year-end foreign exchange settlement effects play a role. The massive trade surplus accumulated by China in 2025 leads to concentrated foreign exchange settlement demands by enterprises near the year’s end, further pushing up the RMB exchange rate. Factors such as the central bank not further cutting interest rates and tight offshore liquidity also contribute to this round of appreciation.

What does this mean for ordinary people and exporters?

Wang Qing, Chief Macro Analyst at Dongfang Jincheng, pointed out that the combination of a weak US dollar and seasonal foreign exchange conversions by exporters has jointly driven the RMB’s strength. This appreciation has a benefit: it can enhance China’s capital market attractiveness to foreign investors, making USD-to-RMB investments relatively more competitive.

Will it continue to rise in 2026?

Although the RMB has already reached a critical level, many institutions believe that, based on trade-weighted exchange rates and economic fundamentals, the RMB is actually undervalued.

ANZ senior strategist Xing Zhaopeng predicts that in the first half of 2026, USD/CNY may fluctuate within the 6.95-7.00 range. However, more optimistic voices come from Goldman Sachs—they believe the RMB is undervalued by about 25% relative to its economic fundamentals, expecting USD/CNY to fall to 6.90 by mid-2026 and further to 6.85 by the end of the year.

Bank of America has an even more positive outlook. They believe that improved US-China relations will enhance the prospects for exporters, and they expect the scale of USD selling by Chinese exporters to increase in 2026, with USD/CNY falling to 6.80 by the end of 2026.

Overall, whether from central bank policies or market expectations, the probability of continued RMB appreciation in 2026 is quite high. For investors and export companies involved in USD-to-RMB transactions, monitoring the exchange rate trend remains important.