Core Viewpoint - In 2025, the RMB exchange rate experienced significant appreciation against the USD, influenced by tariff expectations, fluctuations in the USD, and improvements in the domestic environment, with onshore and offshore RMB appreciating approximately 4.27% and 4.93% respectively [1][2][3] Group 1: RMB Exchange Rate Trends in 2025 - The RMB exchange rate reached its highest levels since May 2023, closing at 6.9879 for onshore and 6.9697 for offshore [2] - The year can be divided into two phases: the first phase saw a depreciation of about 0.65% until early April due to rising global tariff risks, while the second phase from mid-April to year-end saw a cumulative appreciation of approximately 4.9% as external economic conditions improved [2][3] - The depreciation of the USD, driven by various factors including the Federal Reserve's shift to a loose monetary policy, contributed to the RMB's strength [3] Group 2: Internal and External Factors Supporting RMB Appreciation - Strong export performance supported the RMB's appreciation, with a trade surplus exceeding $1 trillion for the first 11 months of 2025 [3] - The Chinese capital market showed resilience, with the Shanghai Composite Index rising 18.41%, the Shenzhen Component Index increasing by 29.87%, and the ChiNext Index up by 49.57%, providing solid support for the RMB [3] - The implementation of stable exchange rate policies helped to smooth fluctuations and maintain market expectations [3][4] Group 3: Outlook for 2026 - The RMB is expected to continue a gradual appreciation against the USD in 2026, influenced by the USD's potential depreciation and narrowing interest rate differentials between China and the US [6][7] - The external economic environment's impact on the RMB may lessen, with improved resilience in China's economy and financial markets [6][7] - Despite potential short-term fluctuations, the RMB is projected to maintain a range of 6.9 to 7.3 against the USD, with a focus on balanced exchange rate management [7][8]

Core Viewpoint - The RMB exchange rate experienced significant appreciation in 2025, influenced by various factors including tariff expectations, fluctuations in the USD, and improvements in the domestic environment, with the onshore and offshore RMB appreciating approximately 4.27% and 4.93% respectively [1][2]. Group 1: RMB Exchange Rate Performance - In 2025, the RMB exchange rate reached its highest levels since May 2023, closing at 6.9879 for onshore and 6.9697 for offshore RMB against the USD [2]. - The year can be divided into two phases: the first phase saw a depreciation of the RMB due to rising global tariff risks, while the second phase experienced a gradual appreciation as external economic conditions improved [2][3]. - The RMB's appreciation was supported by a resilient export performance, with trade surplus exceeding $1 trillion for the first time in 2025 [3][4]. Group 2: External and Internal Factors - The depreciation of the USD was driven by various factors including the Federal Reserve's shift to a loose monetary policy and high fiscal deficits, leading to a cumulative decline of approximately 9.37% for the year [3][5]. - The internal economic resilience, particularly in exports, played a crucial role in supporting the RMB's appreciation, with significant inflows of foreign capital into the domestic market [3][4]. - The stable exchange rate policies implemented by the government helped to smooth fluctuations and maintain market expectations [3][4]. Group 3: Outlook for 2026 - Moving into 2026, the RMB is expected to continue a trend of gradual appreciation against the USD, influenced by the USD's potential depreciation and narrowing interest rate differentials between China and the US [6][7]. - The external economic environment is anticipated to remain favorable, with the RMB's asset attractiveness likely to draw in cross-border capital flows [7][8]. - However, there are cautions regarding the potential for rapid appreciation and the need for risk management strategies among enterprises and financial institutions [9].

Core Viewpoint - The Chinese yuan (RMB) is expected to experience a significant appreciation in 2025, influenced by various factors including tariff expectations, fluctuations in the US dollar, and improvements in the domestic economic environment, with the onshore and offshore RMB appreciating approximately 4.27% and 4.93% respectively by year-end [1][3]. Group 1: 2025 RMB Exchange Rate Performance - The RMB exchange rate showed a notable recovery in 2025, marking the largest increase in five years, with the onshore and offshore RMB closing at 6.9879 and 6.9697 against the USD, respectively, both reaching new highs since May 2023 [3][4]. - The year can be divided into two phases: the first phase from early January to early April saw the RMB depreciate approximately 0.65% due to rising global tariff risks, while the second phase from mid-April to year-end witnessed a cumulative appreciation of about 4.9% as external economic conditions improved [4][5]. Group 2: External and Internal Factors Influencing RMB - Externally, the RMB's appreciation was supported by a warming external economic environment following agreements between China and the US, alongside a depreciation of the USD due to various pressures, including the Federal Reserve's shift to a loose monetary policy [5][6]. - Internally, strong export performance and resilience in the financial market contributed to the RMB's strength, with exports showing unexpected rebounds and a trade surplus exceeding 1 trillion USD for the first time in 2025 [5][6]. Group 3: Future Outlook for 2026 - Moving into 2026, the RMB is expected to continue a gradual appreciation against the USD, supported by a favorable external environment and a potential narrowing of interest rate differentials between China and the US [8][9]. - The RMB's asset attractiveness is anticipated to rise, attracting cross-border capital inflows, although there may be a decline in export growth, which could weaken the trade surplus's support for the exchange rate [9][10]. - Analysts predict that the RMB will likely fluctuate within the 6.9 to 7.3 range against the USD throughout 2026, with the potential for a mild appreciation against a basket of currencies [10][11].