Onshore RMB falls below 7.3 mark. How will the RMB exchange rate go in 2025?

Today, both offshore and onshore RMB fell, with the US dollar falling below 7.3 against the onshore RMB and 7.35 against the offshore RMB. Experts said that the strengthening of the US dollar index and the widening of RMB liquidity in the offshore market are the main reasons for the depreciation of the offshore RMB. On January 2, the US dollar index hit a record high of 109.

In the past 2024, the RMB was relatively strong compared with other non-US currencies. But against the background of a strong US dollar, the RMB exchange rate may fluctuate around 7.3 in the short term. Experts also said that considering that the US dollar will continue to run at a high level for a period of time, the trend of the RMB against the US dollar will show certain volatility. The fluctuation range of the RMB exchange rate in 2025 will be greater than that in 2024.

Looking ahead to 2025, external disturbances such as the trend of the US dollar index may be the biggest risk factor for the RMB exchange rate. However, experts said that under the influence of domestic reserve requirement ratio cuts, interest rate cuts and other incremental policies, internal factors are still expected to support the RMB exchange rate in 2025.

On the news front, on January 2, the US dollar index stood at 109, setting a new high since November 2022, and a series of non-US currencies continued to be under pressure.

In fact, on the last trading day of 2024, the offshore RMB fluctuated sharply and fell throughout the day, falling by more than 400 points at one point, approaching the low of 7.3683 on October 25, 2022. The onshore RMB against the US dollar also fell to 7.3001 at its lowest.

Looking ahead to 2025, external disturbances such as the trend of the US dollar index and potential US policies toward China may be the biggest risk factors for the RMB exchange rate.