The onshore RMB closed at 6.7852 against the US dollar on the last trading day of June 2026, rising 77 points from the previous session. This number represents a profit redistribution that textile exporters are currently navigating.
Dual Signals: Exchange Rate Appreciation and Liquidity Tightening
On June 30, 2026, the onshore RMB official closing price against the USD stood at 6.7852, up 77 points from the previous day. The People's Bank of China set the USD/RMB midpoint at 6.8109, down 66 basis points, the largest appreciation since May 7. This data indicates that the short-term appreciation momentum remains unabated, with no policy intervention to slow the pace.
More notably, liquidity conditions are shifting. The central bank conducted 69.5 billion yuan in 7-day reverse repos and 600 billion yuan in overnight reverse repos, but offset by 524.5 billion yuan in maturing 7-day repos and 300 billion yuan in overnight repos, resulting in a net withdrawal of 155 billion yuan. This suggests that while maintaining basic short-term stability, the PBOC is gradually absorbing excess liquidity. For textile firms reliant on cheap financing, marginal funding costs are beginning to rise.
Exchange Rate Sensitivity in Textile Export Margins
The textile industry is heavily export-oriented, with most orders denominated in US dollars but settled in RMB. The transmission from exchange rate shift to profit erosion is direct: a 1% RMB appreciation against the dollar reduces the book revenue of a $1 million order by approximately 68,000 RMB.
For textile exporters operating on margins of 3%-5%, exchange rate shocks often outweigh raw material price volatility. Small and medium-sized factories, lacking hedging tools and pricing power, bear the brunt. If the current appreciation trend persists into the second half of the year, Q4 order profitability will face further pressure.
However, sensitivity varies by product category. High-value-added products like functional fabrics and branded apparel have greater pricing flexibility to pass on some exchange rate costs. Commodity items such as grey fabrics and yarns, where buyers are highly price-sensitive, have almost no room for price increases.
Regional Industry Cluster Responses
From regional feedback, clusters like Keqiao in Shaoxing and Shengze in Jiangsu show divergence. Some large exporters have begun adjusting quotation strategies, incorporating exchange rate volatility into quarterly pricing models and negotiating floating exchange rate clauses with overseas clients. In contrast, many small factories remain stuck in a passive model of accepting orders and settling at maturity.
Notably, while the PBOC kept the reverse repo rate unchanged at 1.40%, the net withdrawal signals a marginal tightening bias. This indirectly affects textile firms' financing costs and business expectations—when liquidity is no longer abundant, firms prioritize faster receivables and lower inventories over stockpiling.