Group 1: Forex Market Overview - The forex market transaction volume steadily increased in 2025, with a total turnover of 48.52 trillion USD and an average daily turnover of 199.66 billion USD, marking a historical high and a year-on-year growth of 6.54% [2] - The average daily turnover in the RMB forex market reached 148.75 billion USD, with significant growth in trading volumes for foreign currencies and foreign currency interest rate markets, increasing by 27.58% and 17.28% year-on-year, respectively [2] Group 2: RMB Exchange Rate Dynamics - The RMB to USD exchange rate experienced fluctuations, ultimately strengthening, with the year-end rate at 6.9890, appreciating by 4.43% compared to the previous year, while the CFETS RMB exchange rate index ended at 97.99, down 3.43% for the year [3][5] - The RMB exchange rate faced pressure in April due to heightened trade tensions and tariffs, but rebounded later in the year as trade negotiations eased and domestic economic policies improved, leading to a significant appreciation of over 1,000 basis points by year-end [4][5] Group 3: Swap Curve and Interest Rate Dynamics - The swap curve for RMB significantly rose, with the 1Y swap point reaching a new high, influenced by narrowing interest rate differentials between China and the US, which correlated highly with the 10-year US Treasury yield [6][7] - The 1Y swap point deviated from the interest rate parity theory, showing a positive correlation with the appreciation expectations of the RMB, with the average deviation being approximately 49 basis points, marking the first positive deviation since 2023 [7] Group 4: Offshore RMB Liquidity and Market Structure - Offshore RMB liquidity remained tight, with the People's Bank of China issuing a record 300 billion RMB in offshore central bank bills, maintaining a stable yet slightly tight liquidity environment [8] - The interest rate market for foreign currencies showed overall easing, with the domestic USD borrowing rates remaining low, while the spread between domestic and foreign rates widened, reaching a three-year low of -40 basis points by year-end [9]