RMB/USD Exchange Rate Breaches 6.74 Mark, Hits 3.5-Year High

Both the onshore and offshore RMB/USD exchange rates have broken through the 6.74 threshold.

On August 17, the onshore RMB/USD spot rate breached the 6.74 mark during intraday trading, climbing as high as 6.7393 by the time of reporting — the highest level since early February 2023.

The offshore RMB/USD market also crossed the 6.74 threshold on the same day.

On August 17, the offshore RMB/USD rate, which more closely reflects international investor expectations, reached an intraday high of 6.73875, also a fresh 3.5-year high.

The "Q2 2026 China Monetary Policy Report" outlined the main ideas for the next stage of monetary policy, stating that China will steadily deepen exchange rate market-oriented reform, improve the managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies, uphold the decisive role of the market in exchange rate formation, and leverage the exchange rate as an automatic stabilizer for macroeconomic and balance-of-payments adjustments. The report also called for monitoring and analyzing cross-border capital flows, maintaining a bottom-line mindset, taking comprehensive measures to enhance the resilience of the foreign exchange market, stabilizing market expectations, preventing excessive exchange rate adjustments, and keeping the RMB exchange rate basically stable at a reasonable and balanced level. Enterprises and financial institutions were encouraged to embrace a "risk-neutral" philosophy, with financial institutions urged to actively provide exchange rate hedging services to small and micro enterprises.

(Source: The Paper)