On August 4th, the onshore and offshore RMB exchange rates against the US dollar rose slightly. Looking at it over a longer period of time, the RMB exchange rate against the US dollar rose significantly in July, reaching a new high since March 2023 in the middle of the month. Experts say that the weakening of the US dollar index and the release of domestic foreign exchange demand jointly support the strengthening of the renminbi. Under the combination of internal and external favorable factors, it is expected that the RMB exchange rate will remain stable and rise in the next stage, maintaining strong resilience in two-way fluctuations.
Moderate appreciation of RMB exchange rate
On August 4th, the onshore and offshore RMB exchange rates against the US dollar rose slightly. According to Wind data, as of 16:30, the onshore RMB to USD exchange rate closed at 6.7533 yuan, up 10 basis points from the previous closing price, with the highest intraday price reaching 6.7512 yuan; The offshore RMB exchange rate against the US dollar was reported at 6.7542 yuan, up 40 basis points from the previous closing price, and reached a high of 6.7519 yuan during the trading session.
Looking at it over time, in July, the overall appreciation trend of the RMB against the US dollar was maintained. According to Wind data, the onshore RMB exchange rate against the US dollar rose by 0.55% in July, reaching a mid month high of 6.7456 yuan, a new high since March 2023. The offshore RMB exchange rate against the US dollar rose 0.57% in July, reaching a mid month high of 6.7422 yuan, also setting a new high since March 2023.
From external factors, the US dollar index weakened significantly in July, while most non US currencies appreciated, and the appreciation of the Chinese yuan exchange rate was relatively moderate. From the perspective of the entire month of July, the US dollar index first stabilized and then fell, with the decline mainly concentrated after the Federal Open Market Committee (FOMC) interest rate meeting of the Federal Reserve. The market was concerned about the uncertainty of the Walsh policy, and the US dollar index showed a significant weakening. ”Li Liuyang, Chief Analyst of Foreign Exchange Research at CICC Research Department, said.
From an internal perspective, the moderate release of foreign exchange demand and the relatively balanced supply and demand of foreign exchange have jointly contributed to the stable and strong performance of the RMB exchange rate. According to Li Liuyang's analysis, the net foreign exchange settlement level in June was at a relatively high level this year, and the central parity rate also reached a new high level in July. Internal factors supported the stable trend of the RMB exchange rate in July.
According to data released by the China Foreign Exchange Trading Center authorized by the People's Bank of China, on July 30th, the central parity rate of the Chinese yuan against the US dollar was 6.7892 yuan, setting a new high for the year.
Comprehensive measures to maintain stability in the foreign exchange market
Looking ahead to the next stage, multiple experts have stated that the RMB exchange rate is expected to remain stable with some upward movement, maintaining strong resilience amidst two-way fluctuations.
Currently, factors such as Iran's geopolitical risks may continue to bring uncertainty to the global energy and foreign exchange markets, and the expectations of the Federal Reserve's monetary policy also have a significant impact on the US dollar index. Li Liuyang stated that there is still some downward space for the US dollar index in August; Under the expectation of stable exports and a continued moderate to strong middle price in our country, the RMB exchange rate is expected to remain relatively stable, and the overall trend of the exchange rate may appreciate moderately.
According to a research report by Huaxi Securities, China's trade surplus is expected to maintain a large scale, and the willingness of enterprises and residents to settle foreign exchange continues to be released. Coupled with the increasing expectation of interest rate hikes by the Federal Reserve and the stability of domestic monetary policy, the interest rate differential between China and the United States remains relatively stable. With the advancement of RMB internationalization and the growth of international demand, the RMB will still be in the appreciation channel in the medium term.
The Nanhua Futures Research Report stated that in the long run, the trend of RMB appreciation against the US dollar has not changed. However, due to the impact of dividend based foreign exchange purchases and the temporary strengthening of the US dollar index, the pace of RMB appreciation in the third quarter may slow down; In the fourth quarter, under the combined effect of seasonal settlement waves and weak US dollar index, the Chinese yuan is expected to resume its appreciation against the US dollar.
The State Administration of Foreign Exchange recently held an exchange meeting on foreign exchange management in the second half of 2026, stating that since 2026, China's foreign exchange market has shown strong vitality and resilience in complex situations, with the RMB exchange rate fluctuating in both directions and steadily rising, and cross-border funds maintaining a net inflow.
For the key work of foreign exchange management in the second half of 2026, the meeting proposed to build a strong external impact breakwater and wave barrier. Strengthen monitoring of cross-border capital flows, continuously improve macro prudential management and expectation management, and implement comprehensive measures to maintain stability in the foreign exchange market.