The RMB central parity rate reported at 6.99, breaking 7 for the first time in over two and a half years. "De-dollarization" continues, and the RMB's share in global central bank reserves is expected to rise to 10%

The central parity rate of the renminbi against the US dollar reported this morning at 6.9929, marking the first time it has fallen below 7 since May 17, 2023, which may indicate that the mainland intends to allow further appreciation of the renminbi. The offshore renminbi once traded at 6.9533 against the US dollar, the strongest in over two years, with the latest report at 6.9601, while the onshore rate reported at 6.9635. ANZ Expects Lunar New Year Effect to Further Boost Analysts suggest that a stronger renminbi helps alleviate trade tensions between China and its trading partners while enhancing the attractiveness of Chinese assets. Khoon Goh, Head of Asia Research at ANZ, stated that the renminbi central parity rate this morning "sent a strong signal that authorities are still keen to see further appreciation of the renminbi and are willing to accept further currency gains in the context of a weaker dollar." He also noted that with the seasonal effects of the Lunar New Year, we may see the US dollar against the renminbi trending towards 6.9 in the coming weeks. BNY Mellon: Refuting the Notion that 7 is an Insurmountable Barrier Wee Khoon Chong, Senior Asia-Pacific Market Strategist at BNY Mellon, stated that today's central parity rate "is significant in our view, refuting certain claims in the market that 7 is an insurmountable barrier." He pointed out that the continued inflow of Chinese assets and the resilience of domestic sentiment are positive for the future development of the renminbi. On the other hand, UBS anticipates that as investor concerns about US policies increase and portfolio diversification rises, China may benefit from this, expecting the allocation of the renminbi in global central bank foreign exchange reserves to rise to 10% in the medium term. UBS: More Funds Flowing Out of the US Market Massimiliano Castelli, Global Sovereign Market Strategist at UBS, stated in an interview that if tensions involving the US escalate, including increased pressure on the US Treasury market and Trump's attacks on the Federal Reserve, undermining US credibility, the target allocation of the renminbi in global central bank foreign exchange reserves may rise to 10% in the medium term. He said, "This is an opportunity for China at this time, as Trump's recent political moves have accelerated the demand for diversification away from the dollar." In a survey conducted by UBS last year of about 40 central banks, the average long-term target allocation for the renminbi was around 6%. The latest data from the International Monetary Fund (IMF) shows that as of September 2025, the renminbi accounts for 1.9% of global central bank reserves. Castelli pointed out that some advantages of the dollar, such as liquidity markets, credible central banks, geopolitical influence, and fiscal stability, are currently under pressure from existing policies. If more disruptions occur, "you will start to see more funds flowing out of the US market, which is where the opportunities for China and Europe lie." He also believes that under loose policies and increased investor interest in artificial intelligence and high-value manufacturing, Chinese stocks will see more capital inflows this year. "We are at the beginning of a new phase of renewed interest from large institutional investors in China."