Yuan Stable Near 6.78 Despite Dollar Strength
The Chinese yuan held within a narrow band of 6.77 to 6.79 against the US dollar through July 2026, supported by a resilient current account surplus and active policy intervention by the People's Bank of China. On July 24, the China Foreign Exchange Trade System set the USD/CNY central parity rate at 6.7939, reflecting continued pressure from a firm dollar index but also underlying support from China's large trade surplus. Onshore yuan traded at approximately 6.77 in late-afternoon fixing, with offshore yuan holding a modest premium.
Cross-Border Settlement Share Hits Record
The RMB's cross-border settlement share — the proportion of China's cross-border payments settled in yuan — reached 52.9 percent in the first half of 2026, a new all-time high, according to data from the PBOC and China Foreign Exchange Trade System. The milestone reflects growing adoption of the yuan in bilateral trade with Russia, Southeast Asia, the Middle East, and Africa, where yuan-denominated contracts are increasingly preferred over dollar-denominated ones.
CFETS Index and Currency Basket
The CFETS RMB Index, which measures the yuan against a basket of 24 trading-partner currencies, has climbed steadily in 2026 as the dollar softens on expectations of Federal Reserve rate cuts. The index weight structure assigns approximately 19 percent to the US dollar, 18 percent to the euro, 9 percent to the Japanese yen, and 8 percent to the Korean won, giving the yuan meaningful exposure to Asian and European trade flows.
Internationalisation Agenda
The Digital Yuan advanced at the 2026 International Financial Exhibition in Shanghai in June, with PBOC Deputy Governor Zou Lan highlighting progress on cross-border digital yuan pilots. The government's stated goal of promoting the yuan's international use as a reserve and transaction currency remains firmly on track, supported by bilateral currency swap agreements with over 40 central banks worldwide.