Asian FX Focus: RMB Not immune to external adversities

Research evidence excerpt

Asian FX Focus: RMB Not immune to external adversities

Currencies ● Mainland China

19 May 2026

Table 1. USD-RMB forecasts

2Q26F 3Q26F 4Q26F 1Q27F 2Q27F

New 6.75 6.70 6.65 6.62 6.60

Old 6.80 6.78 6.75

Note: Forecast changes were made in Currency Outlook, 15 May.

Source: HSBC FX research forecasts

April FX settlement

April was another strong month of net FX sales in the onshore market, reaching USD42bn, up

from USD35bn in March. Corporates were the main contributors, selling USD48bn of their net

export receipts – equivalent to 56% of the month’s trade surplus. While the numbers have

eased from the peaks seen earlier in the year, they remain broadly in line with the average

levels observed since the USD-CNY fixing began its downward trend in May 2025. We also note

that FX conversion remained robust despite a rise in RMB trade settlement – which has risen to

34% of total trade in March-April, versus 30% in the prior months. Separately, onshore

corporates’ FX deposits continued to rise, surpassing USD600bn in April, indicating that firms

are also repatriating a larger share of their FX holdings onshore. Regarding FX forwards –

outstanding short positions have stopped growing since February (April: USD106bn).

Net portfolio inflows resumed in April (reversing the net outflows from March) – with USD14bn

worth of net cross-border inflows and USD12bn of FX sold. We gather that the net inflows were

equity related, since foreigners continued to sell CNY-denominated bonds in April (for the 12th

consecutive month). Regarding residents’ investments – we note that there have been slower

equity outflows via the Southbound Stock Connect since March – but they likely used their new

QDII quota to buy US equities. US Treasury’s TIC data indicated that while Chinese residents