As the Spring Festival holiday approaches, the RMB exchange rate has continued to appreciate. By the end of January, the RMB/USD exchange rate had risen for six consecutive months.

Exchange Rate Fluctuations

       On February 10, the onshore RMB/USD exchange rate strengthened intraday, with an official closing quote of 6.9129, up 155 basis points from the previous trading day. It touched a high of 6.9085 intraday, reaching a near 33-month high since May 2023. On the same day, the RMB/USD central parity rate was adjusted upward by 65 basis points to 6.9458, while offshore RMB rose in tandem to around 6.9060, creating a coordinated strengthening pattern between onshore and offshore markets.

       Since the beginning of 2025, the RMB has risen 5%, becoming the third-best performing Asian currency since September.

       Analysts believe this round of RMB appreciation differs from any previous cycle in history. The underlying logic includes: settlement demand from Chinese enterprises' improving overseas earnings capabilities, global capital's distrust of the US dollar and demand for currencies backed by real assets, and China's top-level policy design of "taxing" externally to subsidize domestic demand. Factors such as dollar trends, Federal Reserve chair changes, and foreign capital flows will not completely reverse the appreciation trend.

       Based on comprehensive forecast data, international financial institutions show unanimous bullish sentiment toward the 2026 RMB exchange rate:

Aggressive Bulls:

• Deutsche Bank predicts year-end rise to 6.7, the most optimistic current forecast

• Bank of America similarly targets 6.8, believing offshore RMB financing cost advantages will attract capital inflows

Moderate Neutrals:

• UBS, Standard Chartered and other institutions anchor to the 6.9-7.05 range, emphasizing dual support from trade surplus (exceeding $1.1 trillion in 2025) and dollar weakness

• Morgan Stanley conservatively estimates 7.05, noting uncertainties in domestic economic recovery strength

Chinese Institution Views:

• China Merchants Bank forecasts 6.85-7.05

• CITIC Securities gives a wide fluctuation range of 6.80-7.10, both emphasizing the central bank's "preventing overshooting" policy's suppressive effect on one-way trends

       Notably, during China Foreign Exchange Trade System (CFETS) market hours, banks' foreign exchange settlement and sale prices are generally based on CFETS's real-time USD/CNY quotes, adjusted according to their own circumstances. During CFETS market closures, CFETS USD/CNY quotes stop updating, and banks adopt different pricing methods.

       During the Spring Festival, China's interbank foreign exchange market is closed. During this period, some institutions' USD/CNY settlement and sale prices reference CFETS's February 13 USD/CNY closing price, so their prices remain basically unchanged during the holiday—this is the more common practice currently adopted by many banks. Some institutions' USD/CNY settlement and sale prices reference offshore USD/CNY prices, so their prices adjust appropriately during the holiday (most banks adopting this practice have established branches overseas).

       Currently, many foreign trade professionals have already begun their holidays. We particularly recommend that foreign trade enterprises who have not yet settled foreign exchange or have payments due after the holiday maintain attention to offshore RMB exchange rate fluctuations during the Spring Festival period!