The renminbi (Ab.: RMB; simplified Chinese: 人民币; traditional Chinese: 人民幣; pinyin: rénmínbì; literally: "people's currency"; sign: 元; code: CNY) is the official currency of the People's Republic of China. The yuan (Chinese: 元; pinyin: yuán) is the basic unit of the renminbi, but is also used to refer to the Chinese currency generally, especially in international contexts where "Chinese yuan" is widely used to refer to the renminbi. The distinction between the terms renminbi and yuan is similar to that between sterling and pound, which respectively refer to the British currency and its primary unit. One yuan is subdivided into 10 jiao (Chinese: 角; pinyin: jiǎo), and a jiao in turn is subdivided into 10 fen (Chinese: 分; pinyin: fēn). The renminbi is issued by the People's Bank of China, the monetary authority of China.
Until 2005, the value of the renminbi was pegged to the US dollar. As China pursued its transition from central planning to a market economy, and increased its participation in foreign trade, the renminbi was devalued to increase the competitiveness of Chinese industry. It has previously been claimed that the renminbi's official exchange rate was undervalued by as much as 37.5% against its purchasing power parity. More recently, however, appreciation actions by the Chinese government, as well as quantitative easing measures taken by the American Federal Reserve and other major central banks, have caused the renminbi to be within as little as 8% of its equilibrium value by the second half of 2012. Since 2006, the renminbi exchange rate has been allowed to float in a narrow margin around a fixed base rate determined with reference to a basket of world currencies. The Chinese government has announced that it will gradually increase the flexibility of the exchange rate. As a result of the rapid internationalization of the renminbi, it became the world's 8th most traded currency in 2013, and 5th by 2015.
|人民币 (Chinese error: zh-cn is an IETF tag)|
Renminbi banknotes of the 2005 series.
|Plural||The language(s) of this currency does not have a morphological plural distinction.|
|Symbol||元 / ¥|
|Nickname||Grandpa Mao (毛爷爷)|
|yuán (元)||kuài (块)|
|jiǎo (角)||máo (毛)|
|Freq. used||RMB 1, RMB 5, RMB 10, RMB 20, RMB 50, RMB 100|
|Rarely used||RMB 0.1, RMB 0.5|
|Freq. used||RMB 0.1, RMB 0.5, RMB 1|
|Official user(s)||People's Republic of China (mainland)|
Hong Kong (some stores)
Myanmar (in Kokang, Wa and Mandalay)
|Central bank||People's Bank of China|
|Printer||China Banknote Printing and Minting Corporation|
|Mint||China Banknote Printing and Minting Corporation|
|Inflation||2.5%, January 2017|
|Pegged with||Partially, to a basket of trade-weighted international currencies|
"Renminbi" in Simplified (top) and Traditional (bottom) Chinese characters
|Literal meaning||"People's Currency"|
|Simplified Chinese||圆 (or 元)|
|Traditional Chinese||圓 (or 元)|
|Literal meaning||circle (or unit), originally from the round shape of silver coins|
|Formal currency name||人民币 (rénmínbì)||Renminbi||RMB, CNY, CNH|
|Formal name for 1 unit||元 or 圆 (yuán)||yuan|
|Formal name for 1⁄10 unit||角 (jiǎo)||jiao|
|Formal name for 1⁄100 unit||分 (fēn)||fen|
|Other currency names||Chinese yuan||¥|
|Other unit names (1)||块 (kuài)|
The ISO code for renminbi (which may also be used for the yuan) is CNY (an abbreviation for "Chinese yuan"), or also CNH when traded in off-shore markets such as Hong Kong. The currency is often abbreviated RMB, or indicated by the yuan sign ¥. The latter may be written CN¥ to distinguish it from other currencies with the same symbol (such as the Japanese yen). In Chinese texts the currency may also be indicated with the Chinese character for the yuan, 圆 (or 元 informally). The renminbi is legal tender in mainland China, but not in Hong Kong or Macau. However, Renminbi is widely accepted in Hong Kong and Macau, and are easily exchanged in the two territories, with banks in Hong Kong allowing people to maintain accounts in RMB and withdraw RMB banknotes from ATM terminals.
A variety of currencies circulated in China during the Republic of China (ROC) era, most of which were denominated in the unit yuán (Mandarin pronunciation in IPA: [ɥæ̌n˧˥]). Each was distinguished by a currency name, such as the fabi ("legal tender"), the "gold yuan", and the "silver yuan".
The renminbi was introduced by the People's Bank of China in December 1948, about a year before the establishment of the People's Republic of China. It was issued only in paper money form at first, and replaced the various currencies circulating in the areas controlled by the Communists. One of the first tasks of the new government was to end the hyperinflation that had plagued China in the final years of the Kuomintang (KMT) era. That achieved, a revaluation occurred in 1955 at the rate of 1 new yuan = 10,000 old yuan.
As the Communist Party of China took control of ever larger territories in the latter part of the Chinese Civil War, its People's Bank of China began in 1948 to issue a unified currency for use in Communist-controlled territories. Also denominated in yuan, this currency was identified by different names, including "People's Bank of China banknotes" (simplified Chinese: 中国人民银行钞票; traditional Chinese: 中國人民銀行鈔票; from November 1948), "New Currency" (simplified Chinese: 新币; traditional Chinese: 新幣; from December 1948), "People's Bank of China notes" (simplified Chinese: 中国人民银行券; traditional Chinese: 中國人民銀行券; from January 1949), "People's Notes" (人民券, as an abbreviation of the last name), and finally "People's Currency", or "renminbi", from June 1949.
From 1949 until the late 1970s, the state fixed China's exchange rate at a highly overvalued level as part of the country's import-substitution strategy. During this time frame, the focus of the state's central planning was to accelerate industrial development and reduce China's dependence on imported manufactured goods. The overvaluation allowed the government to provide imported machinery and equipment to priority industries at a relatively lower domestic currency cost than otherwise would have been possible.
China's transition by the mid-1990s to a system in which the value of its currency was determined by supply and demand in a foreign exchange market was a gradual process spanning 15 years that involved changes in the official exchange rate, the use of a dual exchange rate system, and the introduction and gradual expansion of markets for foreign exchange.
The most important move to a market-oriented exchange rate was an easing of controls on trade and other current account transactions, as occurred in several very early steps. In 1979 the State Council approved a system allowing exporters and their provincial and local government owners to retain a share of their foreign exchange earnings, referred to as foreign exchange quotas. At the same time, the government introduced measures to allow retention of part of the foreign exchange earnings from non-trade sources, such as overseas remittances, port fees paid by foreign vessels, and tourism.
As early as October 1980, exporting firms that retained foreign exchange above their own import needs were allowed to sell the excess through the state agency responsible for the management of China's exchange controls and its foreign exchange reserves, the State Administration of Exchange Control. Beginning in the mid-1980s, the government sanctioned foreign exchange markets, known as swap centers eventually in most large cities.
The government also gradually allowed market force to take the dominant role by introducing an "internal settlement rate" of RMB 2.8 to 1 US dollar which was a devaluation of almost 100 percent.
In November 1993 the Third Plenum of the Fourteenth CPC Central Committee approved a comprehensive reform strategy in which foreign exchange management reforms were highlighted as a key element for a market-oriented economy. A floating exchange rate regime and convertibility for RMB were seen as the ultimate goal of the reform. Conditional convertibility under current account was achieved by allowing firms to surrender their foreign exchange earning from current account transactions and purchase foreign exchange as needed. Restrictions on Foreign Direct Investment (FDI) was also loosened and capital inflows to China surged.
During the era of the command economy, the value of the renminbi was set to unrealistic values in exchange with western currency and severe currency exchange rules were put in place. With the opening of the Chinese economy in 1978, a dual-track currency system was instituted, with renminbi usable only domestically, and with foreign visitors to China forced to use foreign exchange certificates. The unrealistic levels at which exchange rates were pegged led to a strong black market in currency transactions.
In the late 1980s and early 1990s, China worked to make the RMB more convertible. Through the use of swap centres, the exchange rate was brought to realistic levels and the dual track currency system was abolished.
As of 2013, the renminbi is convertible on current accounts but not capital accounts. The ultimate goal has been to make the RMB fully convertible. However, partly in response to the Asian financial crisis in 1998, China has been concerned that the Chinese financial system would not be able to handle the potential rapid cross-border movements of hot money, and as a result, as of 2012, the currency trades within a narrow band specified by the Chinese central government.
Following the Internationalization of the renminbi, on 30 November 2015, the IMF voted to designate the renminbi as one of several main world currencies, thus including it in the basket of special drawing rights. The RMB became the first emerging market currency to be included in the IMF’s SDR basket on 1 October 2016. The other main world currencies are the United States dollar, euro, British pound, and Japanese yen.
As of 2016, renminbi banknotes are available in denominations from ¥0.1, ¥0.2, ¥0.5 (1, 2, and 5 jiao), ¥1, ¥2, ¥5, ¥10, ¥20, ¥50 and ¥100 yuan. These denominations have been available since 1955, except for the 50 and 100 yuan notes (added in 1980) and 20 yuan notes (added in or after 1999). Coins are available in denominations from 1 fen to 1 yuan (¥0.01–1). Thus some denominations exist in both coins and banknotes. On rare occasions larger yuan coin denominations such as ¥5 have been issued to commemorate events but use of these outside of collecting has never been widespread.
The denomination of each banknote is printed in Chinese. The numbers themselves are printed in financial Chinese numeral characters, as well as Arabic numerals. The denomination and the words "People's Bank of China" are also printed in Mongolian, Tibetan, Uyghur and Zhuang on the back of each banknote, in addition to the boldface Hanyu Pinyin "Zhongguo Renmin Yinhang" (without tones). The right front of the note has a tactile representation of the denomination in Chinese Braille starting from the fourth series. See corresponding section for detailed information.
The fen and jiao denominations have become increasingly unnecessary as prices have increased. Coins under ¥0.1 are used infrequently. Chinese retailers tend to avoid decimal values (such as ¥9.99), opting instead for integer values of yuan (such as ¥9 or ¥10).
In 1953, aluminium 1-, 2-, and 5-fen coins began being struck for circulation, and were first introduced in 1955. These depict the national emblem on the obverse (front) and the name and denomination framed by wheat stocks on the reverse (back). In 1980, brass 1-, 2-, and 5-jiao and cupro-nickel 1-yuan coins were added, although the 1 and 2 jiao were only produced until 1981, with the last 5 jiao and 1 yuan issued in 1985. All jiao coins depicted similar designs to the fen coins while the yuan depicted the Great Wall of China. In 1991, a new coinage was introduced, consisting of an aluminium 1 jiao, brass 5 jiao and nickel-clad-steel 1 yuan. These were smaller than the previous jiao and yuan coins and depicted flowers on the obverse and the national emblem on the reverse. Issuance of the aluminum 1- and 2-fen coins ceased in 1991, with that of the 5 fen halting in 1994. The small coins were still made for annual uncirculated mint sets in limited quantities, and from the beginning of 2005 the 1-fen coin got a new lease on life by being issued again every year since then up to present. New designs of the 1 and 5 jiao and 1 yuan were again introduced in between 1999 and 2002, with the 1 jiao being significantly reduced in size. In 2005, the metallic composition of the 1 jiao was changed from aluminum to more durable nickel-plated steel. The frequency of usage of coins varies between different parts of China, with coins typically being more popular in urban areas, and small notes being more popular in rural areas. Older fen and large jiao coins are uncommonly still seen in circulation but are still valid in exchange.
As of 2018, there have been five series of renminbi banknotes issued by the People's Republic of China:
In 1999, a commemorative red ¥50 note was issued in honor of the 50th anniversary of the establishment of the People's Republic of China. This note features Mao Zedong on the front and various animals on the back.
An orange polymer note, and so far, China's only polymer note, commemorating the new millennium was issued in 2000 with a face value of ¥100. This features a dragon on the obverse and the reverse features the China Millennium monument (at the Center for Cultural and Scientific Fairs).
The renminbi yuan has different names when used in minority regions.
Renminbi currency production is carried out by a state owned corporation, China Banknote Printing and Minting Corporation (CBPMC; 中国印钞造币总公司) headquartered in Beijing. CBPMC uses several printing, engraving and minting facilities around the country to produce banknotes and coins for subsequent distribution. Banknote printing facilities are based in Beijing, Shanghai, Chengdu, Xi'an, Shijiazhuang, and Nanchang. Mints are located in Nanjing, Shanghai, and Shenyang. Also, high grade paper for the banknotes is produced at two facilities in Baoding and Kunshan. The Baoding facility is the largest facility in the world dedicated to developing banknote material according to its website. In addition, the People's Bank of China has its own printing technology research division that researches new techniques for creating banknotes and making counterfeiting more difficult.
On 13 March 2006, some delegates to an advisory body at the National People's Congress proposed to include Sun Yat-sen and Deng Xiaoping on the renminbi banknotes. However, the proposal was not adopted.
|Rank||Currency||ISO 4217 code
|% daily share|
|United States dollar||
|New Zealand dollar||
|Hong Kong dollar||
|South Korean won||
|South African rand||
For most of its early history, the RMB was pegged to the U.S. dollar at ¥2.46 per USD (note: during the 1970s, it was revalued until it reached ¥1.50 per USD in 1980). When China's economy gradually opened in the 1980s, the RMB was devalued in order to improve the competitiveness of Chinese exports. Thus, the official exchange rate increased from ¥1.50 in 1980 to ¥8.62 by 1994 (the lowest rate on record). Improving current account balance during the latter half of the 1990s enabled the Chinese government to maintain a peg of ¥8.27 per USD from 1997 to 2005.
The RMB reached a record high exchange value of ¥6.0395 to the U.S. dollar on 14 January 2014. Chinese leadership have been raising the yuan to tame inflation, a step U.S. officials have pushed for years to lower the massive trade deficit with China. Strengthening the value of the RMB also fits with the Chinese transition to a more consumer-led economic growth model.
In 2015 the People's Bank of China again devalued their country's currency. As of 1 September 2015, the exchange rate for 1 USD is ¥6.37.
However the peg was reinstituted unofficially when the financial crisis hit: "Under intense pressure from Washington, China took small steps to allow its currency to strengthen for three years starting in July 2005. But China 're-pegged' its currency to the dollar as the financial crisis intensified in July 2008."
On 19 June 2010, the People’s Bank of China released a statement simultaneously in Chinese and English indicating that they would "proceed further with reform of the RMB exchange rate regime and increase the RMB exchange rate flexibility". The news was greeted with praise by world leaders including Barack Obama, Nicolas Sarkozy and Stephen Harper. The PBoC maintained there would be no "large swings" in the currency. The RMB rose to its highest level in five years and markets worldwide surged on Monday, 21 June following China's announcement.
In August 2015, Joseph Adinolfi, a reporter for MarketWatch, reported that China had re-pegged the RMB. In his article, he narrated that "Weak trade data out of China, released over the weekend, weighed on the currencies of Australia and New Zealand on Monday. But the yuan didn’t budge. Indeed, the Chinese currency, also known as the renminbi, has been remarkably steady over the past month despite the huge selloff in China’s stock market and a spate of disappointing economic data. Market strategists, including Simon Derrick, chief currency strategist at BNY Mellon, and Marc Chandler, head currency strategist at Brown Brothers Harriman, said that’s because China’s policy makers have effectively re-pegged the yuan. “When I look at the dollar-renminbi right now, that looks like a fixed exchange rate again. They’ve re-pegged it,” Chandler said."
The RMB has now moved to a managed floating exchange rate based on market supply and demand with reference to a basket of foreign currencies. In July 2005, the daily trading price of the U.S. dollar against the RMB in the inter-bank foreign exchange market was allowed to float within a narrow band of 0.3% around the central parity  published by the People's Bank of China; in a later announcement published on 18 May 2007, the band was extended to 0.5%. On 14 April 2012, the band was extended to 1.0%. On 17 March 2014, the band was extended to 2%. China has stated that the basket is dominated by the United States dollar, euro, Japanese yen and South Korean won, with a smaller proportion made up of the British pound, Thai baht, Russian ruble, Australian dollar, Canadian dollar and Singapore dollar.
On 10 April 2008, it traded at ¥6.9920 per US dollar, which was the first time in more than a decade that a dollar had bought less than seven yuan, and at 11.03630 yuan per euro.
Beginning in January 2010, Chinese and non-Chinese citizens have an annual exchange limit of a maximum of US$50,000. Exchange will only proceed if the applicant appears in person at the relevant bank, and presents their passport or Chinese ID; these deals are being centrally registered. The maximum dollar withdrawal is $10,000 per day, the maximum purchase limit of USD is $500 per day. This stringent management of the currency leads to a bottled-up demand for exchange in both directions. It is viewed as a major tool to keep the currency peg, preventing inflows of 'hot money'.
A shift of Chinese reserves into the currencies of their other trading partners has caused these nations to shift more of their reserves into dollars, leading to no great change in the value of the renminbi against the dollar.
The People’s Bank of China lowered the renminbi’s daily fix to the US dollar by 1.9 per cent to ¥6.2298 on 11 August 2015. The People’s Bank of China again lowered the renminbi’s daily fix to the US dollar from ¥6.620 to ¥6.6375 after the Brexit on 27 June 2016. It had not been this low since December 2010.
Before 2009, the Chinese renminbi had little to no exposure in the international markets because of strict government controls by the central Chinese government that prohibited almost all export of the currency, or use of it in international transactions. Transactions between Chinese companies and a foreign entity were generally denominated in US dollars. With Chinese companies unable to hold US dollars and foreign companies unable to hold Chinese yuan, all transactions would go through the People's Bank of China. Once the sum was paid by the foreign party in dollars, the central bank would pass the settlement in renminbi to the Chinese company at the state-controlled exchange rate.
In June 2009 the Chinese officials announced a pilot scheme where business and trade transactions were allowed between limited businesses in Guangdong province and Shanghai, and only counterparties in Hong Kong, Macau, and select ASEAN nations. Proving a success, the program was further extended to 20 Chinese provinces and counterparties internationally in July 2010, and in September 2011 it was announced that the remaining 11 Chinese provinces would be included.
In steps intended to establish the renminbi as an international reserve currency, China has agreements with Russia, Vietnam, Sri Lanka, Thailand, and Japan, allowing trade with those countries to be settled directly in renminbi instead of requiring conversion to US dollars, with Australia and South Africa to follow soon.
Currency restrictions regarding renminbi-denominated bank deposits and financial products were greatly liberalized in July 2010. In 2010 renminbi-denominated bonds were reported to have been purchased by Malaysia's central bank and that McDonald's had issued renminbi denominated corporate bonds through Standard Chartered Bank of Hong Kong. Such liberalization allows the yuan to look more attractive as it can be held with higher return on investment yields, whereas previously that yield was virtually none. Nevertheless, some national banks such as Bank of Thailand (BOT) have expressed a serious concern about RMB since BOT cannot substitute the deprecated US dollars in its US$200 billion foreign exchange reserves for renminbi as much as it wishes because:
To meet IMF requirements, China gave up some of its tight control over the currency.
Countries that are left-leaning in the political spectrum had already begun to use the renminbi as an alternative reserve currency to the United States dollar; the Central Bank of Chile reported in 2011 to have US$91 million worth of renminbi in reserves, and the president of the Central Bank of Venezuela, Nelson Merentes, made statements in favour of the renminbi following the announcement of reserve withdrawals from Europe and the United States. In Africa, the central banks of Ghana, Nigeria, and South Africa either hold RMB as a reserve currency or have taken steps to purchase bonds denominated in RMB.
The two special administrative regions, Hong Kong and Macau, have their own respective currencies, according to the "one country, two systems" principle and the basic laws of the two territories. Therefore, the Hong Kong dollar and the Macanese pataca remain the legal tenders in the two territories, and renminbi, although sometimes accepted, is not legal tender. Banks in Hong Kong allow people to maintain accounts in RMB. Because of changes in legislation in July 2010, many banks around the world are now slowly offering individuals the chance to hold deposits in Chinese renminbi.
The RMB had a presence in Macau even before the 1999 return to the People's Republic of China from Portugal. Banks in Macau can issue credit cards based on the renminbi, but not loans. Renminbi-based credit cards cannot be used in Macau's casinos.
The Republic of China, which governs Taiwan, believes wide usage of the renminbi would create an underground economy and undermine its sovereignty. Tourists are allowed to bring in up to ¥20,000 when visiting Taiwan. These renminbi must be converted to the New Taiwan dollar at trial exchange sites in Matsu and Kinmen. The Chen Shui-bian administration insisted that it would not allow full convertibility until the mainland signs a bilateral foreign exchange settlement agreement, though president Ma Ying-jeou has pledged to allow full convertibility as soon as possible.
The renminbi circulates in some of China's neighbors, such as Pakistan, Mongolia and northern Thailand. Cambodia welcomes the renminbi as an official currency and Laos and Myanmar allow it in border provinces such as Wa and Kokang and economic zones like Mandalay. Though unofficial, Vietnam recognizes the exchange of the renminbi to the đồng.
Since 2007, RMB-nominated bonds are issued outside mainland China; these are colloquially called "dim sum bonds". In April 2011, the first initial public offering denominated in renminbi occurred in Hong Kong, when the Chinese property investment trust Hui Xian raised ¥10.48 billion ($1.6 billion) in its IPO. Beijing has allowed renminbi-denominated financial markets to develop in Hong Kong as part of the effort to internationalise the renminbi.
Since currency flows in and out of mainland China are still restricted, RMB traded in off-shore markets, such as the Hong Kong market, can have a different value to RMB traded on the mainland. The offshore RMB market is usually denoted as CNH, but there is another RMB interbank and spot market in Taiwan for domestic trading known as CNT.
Note that the two CNT mentioned above are different from each other.
|Current CNY exchange rates|
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The qualified foreign institutional investor (QFII) programme started in 2002 and allowed licensed foreign institutional investors a quota to buy Chinese-listed A-shares (previously only available to domestic investors).
The two countries agreed to allow direct renminbi-sterling trading in Shanghai and offshore, making the pound the fourth currency to trade directly against the renminbi, while Chinese banks will be permitted to set up branches in London.
Article 18: National laws shall not be applied in the Hong Kong Special Administrative Region except for those listed in Annex III to this Law.
Article 18: National laws shall not be applied in the Macao Special Administrative Region except for those listed in Annex m to this Law.