Recently, global currency market volatility has intensified, while the trend of the Chinese yuan against the US dollar has remained stable and slightly strong. On November 25th, both offshore and onshore RMB spot exchange rates against the US dollar rose above 7.09, setting a new high in over a year. On the 26th, the People's Bank of China authorized the China Foreign Exchange Trading Center to announce that the central parity rate of the RMB against the US dollar in the interbank foreign exchange market was 7.0796 yuan, an increase of 30 basis points compared to the previous trading day. Since the beginning of this year, the central parity rate of the Chinese yuan against the US dollar has increased by about 1000 basis points. The three major renminbi exchange rate indices, which measure the renminbi against a basket of currencies, have risen to their highest point since early April. According to data from the China Foreign Exchange Trading Center, the three major RMB exchange rate indices rose across the board last week. Among them, the CFETS RMB exchange rate index was reported at 98.22; The BIS currency basket Renminbi exchange rate index reported 104.66; The SDR currency basket Renminbi exchange rate index was reported at 92.60. Why did the Renminbi emerge from a comprehensive strong market trend? Experts believe that this is mainly due to the strong performance of the renminbi in terms of fundamentals and capital flows compared to non US currencies. Since the beginning of this year, the domestic economy has continued to stabilize and improve, and several international investment banks have raised their forecasts for China's economic growth; Strong foreign trade performance provides solid fundamental support for exchange rate performance; The impressive performance of the capital market has enhanced the attractiveness of RMB assets. Wang Qing, Chief Macro Analyst of Oriental Jincheng, stated that the recent adjustment of the central parity rate of the Chinese yuan against the US dollar towards a stronger direction is related to the steady development of the Chinese economy, while the US dollar exchange rate has fallen during the same period. In the view of Guan Tao, Global Chief Economist of Bank of China Securities, this year, against the backdrop of increasing uncertainty in the international economic situation, the renminbi has risen instead of falling, reflecting the comprehensive impact of multiple factors such as the recovery and improvement of the Chinese economy and the weakening of the US dollar index. It is expected that these factors will continue to support the future trend of the renminbi exchange rate. Guan Tao believes that the trend of the RMB exchange rate in 2026 may face multiple favorable factors: firstly, the domestic economy is recovering and improving, and the pace of technological innovation is further accelerating; Secondly, the stable economic and trade relations between China and the United States have boosted market sentiment; Thirdly, the credit gap in the US dollar may further widen; Fourthly, the resumption of interest rate cuts by the Federal Reserve may drive the weakening of the US dollar. In Wang Qing's view, the market generally expects that the Federal Reserve may continue to cut interest rates in the future, and the short-term upward space for the US dollar index is limited. The fundamentals of our country's economy will provide important internal support for the RMB exchange rate, and it is expected that the RMB will remain in a stable and strong state for a period of time. In the third quarter of 2025, the People's Bank of China emphasized the need to adhere to a managed floating exchange rate system based on market supply and demand, adjusted with reference to a basket of currencies, maintain exchange rate flexibility, strengthen expectation guidance, prevent exchange rate overshoot risks, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. (New Society)