RMB Central Parity Rate Rises Sharply to New High, Expected to Continue Two-Way Fluctuation Pattern in the Future

China Economic Journal Reporter Tan Zhijuan Beijing Report

“Recently, our company has exchanged some RMB for US dollars. If the USD amount is large, we usually use cross-border payment service providers to convert it into RMB, but there is a certain fee involved,” said a manager of a foreign trade company in Guangdong on March 11 in an interview with China Business Journal.

After the Spring Festival, the RMB to USD exchange rate has continued to strengthen.

On March 10, the People’s Bank of China authorized the China Foreign Exchange Trade System to announce that the midpoint rate of RMB to USD was 6.8982, a significant increase of 176 basis points from the previous trading day, reaching the highest since April 25, 2023. On the same day, the onshore RMB to USD exchange rate closed at 6.8718, up 465 basis points from the previous trading day.

On March 11, the RMB to USD midpoint rate was 6.8917, up 65 basis points from the previous day.

Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, told reporters, “The current RMB appreciation is the result of multiple internal and external factors working together.”

Bai Wenxi further analyzed that firstly, the continued weakening of the US dollar is a major factor. After the Federal Reserve announced a rate cut in December 2025, market expectations of further rate cuts in 2026 increased, putting sustained pressure on the US dollar index.

Yang Delong, Chief Economist and Fund Manager at Qianhai Kaiyuan Fund, also said that over the past year, the Federal Reserve has implemented multiple rate cuts, and the market expects continued cuts in the second half of this year. Against this backdrop, the US dollar index has shown a noticeable decline, supporting the RMB’s appreciation.

Secondly, the economic fundamentals are stable and improving. China’s economic operation remains generally stable and positive, with the year-end foreign exchange settlement demand significantly stronger than seasonal levels. Before and after the National People’s Congress, market expectations for a series of growth-stabilizing policies increased, boosting market confidence.

Thirdly, capital flow factors play a role. Changes in the global geopolitical landscape have highlighted the safe-haven attributes of RMB assets, attracting some overseas funds. Meanwhile, domestic companies previously held large USD long positions, and recent RMB appreciation has triggered dollar long position repurchases, increasing market foreign exchange settlement, forming a positive feedback loop of “appreciation—settlement—further appreciation.”

Yang Delong believes that this round of RMB appreciation results from multiple factors and also reflects ongoing global capital confidence in RMB assets.

Not only are global capital optimistic about the RMB, but the use of RMB by global enterprises is also increasing. A recent report by Standard Chartered Bank shows that the use of RMB in trade and supply chains by global companies is expanding. About 23% of their revenue and 25% of their costs involve RMB exposure, while only 14% of their debt is denominated in RMB. There is still a gap between operational exposure and financing strategies, indicating significant room for RMB expansion in corporate financing. The report is based on surveys of nearly 300 large enterprises across 19 industries worldwide.

Wu Yasi, Managing Director of Standard Chartered Bank and Head of China Open and RMB Internationalization Team, said in an interview, “More and more global companies are widely using RMB in cross-border trade, procurement, and supply chain activities. As the infrastructure of the cross-border RMB market continues to improve and liquidity increases, RMB usage is increasingly driven by corporate operational needs, including trade settlement and balance sheet currency matching.”

Regarding exchange rate policies, Pan Gongsheng, Governor of the People’s Bank of China, stated at a press conference on March 6 during the Fourth Session of the 14th National People’s Congress that the RMB has appreciated against the USD this year, which is related to China’s sustained economic growth, the overall weakening of the US dollar index, and seasonal foreign exchange settlement by enterprises. Currently, the bilateral exchange rate of RMB to USD is within the median range of recent years.

Looking ahead, experts generally expect the RMB exchange rate to continue fluctuating bidirectionally with a moderate overall appreciation.

Lin Xianping, Associate Professor at Zhejiang University City College and Executive Deputy Secretary-General of the China Urban Expert Think Tank Committee, said, “The RMB exchange rate is likely to continue its pattern of two-way fluctuations and gentle appreciation, with the exchange rate center possibly in the 6.85–6.95 range.”

From the annual trend, Bai Wenxi predicts that the RMB to USD exchange rate will fluctuate bidirectionally and remain basically stable at a reasonable and balanced level.

Minyin Research also stated that, looking forward, under the stable and improving domestic economic fundamentals, the attractiveness of RMB assets will continue to rise, and the RMB exchange rate is expected to revert to a pattern of both appreciation and depreciation, with two-way floating.

For foreign trade companies, Lin Xianping said that for those relying on USD settlement, RMB appreciation presents both opportunities and challenges. Companies should adhere to a neutral exchange rate risk principle.

Bai Wenxi suggested that foreign trade companies should abandon the mindset of one-sided betting, and through comprehensive use of financial derivatives, optimized settlement methods, natural hedging, and operational restructuring, turn exchange rate fluctuations from a “cost item” into an opportunity to enhance risk management capabilities, achieving steady operation in a complex and changing international environment.

(Edited by Hao Cheng, Reviewed by Zhu Ziyun, Proofread by Zhang Guogang)