[Zhenzhuo Hong Kong Stock Market Experts] The RMB has risen 3.7% against the US dollar this year and is expected to test 7 level before the end of the year
Last Friday, the People's Bank of China, the National Development and Reform Commission, and the Financial Regulatory Authority jointly issued the "Regulations on RMB Payment and Services," clearly requiring all types of business entities not to refuse cash payments without reason. The new regulations will officially take effect on February 1, 2026.
According to the regulations, except in cases where laws, regulations, or rules explicitly require the use of non-cash payment instruments, no entity or individual may refuse cash payments, nor may they require or induce others to refuse cash payments. At the same time, any discriminatory measures against cash payments are prohibited to ensure the convenience of cash payments.
Xinhua News Agency reported that the introduction of the new regulations aims to further consolidate the achievements of rectifying the refusal of cash payments and promote the construction of a payment environment where cash and non-cash payment methods develop in a coordinated and complementary manner, thereby enhancing the sense of gain and convenience for the public, especially vulnerable groups, in the digital economy era.
In terms of exchange rates, the RMB has shown a strong and fluctuating trend since April, reaching a weekly high of 7.04 last Friday with strong upward momentum. So far this month, the RMB has appreciated by about 0.5% against the US dollar, and it has risen by 3.7% this year, potentially marking the strongest annual performance since 2020. It is expected to test the high of 6.995 from September last year in the short term.
Factors driving the short-term strength of the RMB include the Federal Reserve's dovish policy stance and the seasonal foreign exchange settlement demand of mainland Chinese exporters before the Spring Festival. Additionally, the People's Bank of China has recently gradually raised the daily official guidance rate for the RMB, signaling a willingness to allow some appreciation. Looking ahead to this week, the market will welcome the People's Bank of China's interest rate decision on Monday. China is expected to keep benchmark lending rates unchanged for the seventh consecutive month in December.
Among the 25 respondents surveyed by Reuters, all expect China to keep the one-year and five-year Loan Prime Rates (LPR) unchanged at 3.0% and 3.5%, respectively, on Monday. This consensus was formed after the People's Bank of China kept the seven-day reverse repo rate unchanged at 1.4% this month.
Economists said policymakers are in no hurry to cut interest rates, as China, the world's second-largest economy, is expected to achieve the economic growth target of about 5% set by Beijing in 2025, but they expect a shift to easing next year. Several major banks expect China to restart policy easing as early as January 2026, with a possible 20 basis point rate cut.
Date: Monday, December 22, 2025
(Author: Professor Li Huifen, Greater Bay Area Family Office Association) (The author does not hold the above stocks)
The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.
