Renminbi

The renminbi is the official currency of China. Its name means "People's Currency," and it is issued by the People's Bank of China, which is in charge of managing the country's money. As of April 2025, the renminbi is one of the most important currencies in the world.

The basic unit of the renminbi is called the Chinese yuan. You might often hear people using the word "yuan" when they talk about Chinese money, especially when discussing it with people from other countries.

Each yuan is divided into smaller parts. One yuan equals 10 jiao, and each jiao is further divided into 10 fen. These smaller units help people make precise payments for everyday items. The symbol for the renminbi is ¥, and its international code is CNY.

Exchange rate

Until 2005, the exchange rate of the renminbi was pegged to the US dollar. As China changed its economy and joined more global trade, the value of the renminbi was adjusted. By 2015, international experts felt it was fairly valued.

In 2016, the renminbi became one of the special reserve currencies used by the International Monetary Fund. This showed that the renminbi was becoming more important in world finance.

Terminology

The official code for the renminbi is CNY, which combines China's country code CN with the letter Y from "yuan." When used outside of China, the renminbi is called CNH, and its value changes based on market conditions. Inside China, the currency is always CNY, and its value is set daily by the People's Bank of China.

People often call the renminbi "yuan," which is the main unit of this currency. Other smaller units include jiao and fen. In everyday speech, Chinese speakers usually say "kuai" (meaning "piece") when talking about money, such as saying "eight kuai" for ¥8. The symbol for the yuan is ¥, but to avoid confusing it with the Japanese yen, people sometimes write "RMB" before the amount.

History

See also: History of Chinese currency

Many different kinds of money called yuan or dollar were used in places like mainland China, Taiwan, Hong Kong, Macau, and Singapore. These all started from a type of money called the Spanish dollar that China brought in from Spanish America a long time ago. The first silver dollar or yuan that was made in Qing dynasty China was called the silver dragon dollar and it was introduced in 1889. Later, paper money called banknotes was also made, and it could be exchanged for silver dollars until 1935.

The renminbi, China’s main money, was started by the People's Bank of China in December 1948. At first, it was only made as paper money, and it replaced the different kinds of money used in areas controlled by the Communists. One of the first jobs of the new government was to fix a big problem with prices rising very fast, called hyperinflation, that happened in the last years of the Kuomintang government. After fixing this, in 1955 the value of the money was changed: 1 new yuan became worth 10,000 old yuan.

In 2019, the People’s Bank of China made new versions of renminbi banknotes and coins. These new notes included the ¥50, ¥20, ¥10, and ¥1 notes, plus the ¥1, ¥0.5, and ¥0.1 coins. The new money had better safety marks, nicer colors, and better printing to make it harder to copy.

In the early 2020s, China started a digital version of the renminbi, also called the digital yuan or e-CNY. This digital money was tested in cities like Shenzhen, Suzhou, and Chengdu starting in 2020. By 2023, it could be used for things like riding buses, getting government money, buying things in stores, and some international tests. The digital yuan is meant to make payments easier, give people another way to pay besides big companies like Alipay and WeChat Pay, and help more people use money.

Era of the command economy

Further information: Command economy

From 1949 until the late 1970s, the government controlled China’s money very tightly. They set the value of the renminbi much higher than it really should be. This helped the government buy machines and tools from other countries more cheaply.

Transition to an equilibrium exchange rate

By the mid-1990s, China started changing how it decided the value of its money. This was a slow process that took about 15 years. The government let businesses keep some of the money they earned from selling things to other countries. This helped create markets where people could buy and sell money.

Foreign exchange certificates, 1980–1994

From 1980 to 1994, people from other countries visiting China used special money called foreign exchange certificates or FECs. These were different from regular renminbi and could only be used in special stores for tourists. Because regular people couldn’t use them easily, a secret market grew up where people would try to trade them for more renminbi.

Evolution of exchange policy since 1994

In 1993, China decided to change how it handled money from other countries. The goal was to let the renminbi find its own value in the world, like other currencies. This meant letting businesses bring in and send out money more freely.

Convertibility

During the time when the government tightly controlled the economy, the renminbi’s value was set too high compared to money from Western countries. In the late 1980s and early 1990s, China worked to make the renminbi easier to trade with other currencies. By 1994, the value was changed to be more realistic, and special tourist money was stopped. It stayed this way until 2005 when China let the renminbi change value a little more freely.

As of 2013, the renminbi could be used for everyday trades but not for big investments going in and out of the country. The goal is to let it be used for everything, but China worries about sudden big changes in money moving in and out, so it still controls it tightly.

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 renminbi 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 dollar, the euro, sterling, and the yen.

Digital renminbi

Main article: Digital renminbi

In October 2019, China’s central bank, PBOC, said it would create a digital renminbi. This digital money, also called DCEP, could work without normal banks, helping visitors and supporting a society where people use less cash. Some people think this is mainly to help China control its money better. Others say the real problem for the renminbi being used worldwide is that China doesn’t let foreign money flow in and out easily.

The PBOC has created many ideas and plans for this digital money, using special computer technology called blockchain. These plans include ways to control how much digital money there is, special cards to use it, and linking it to bank accounts. Some worry this could give China too much control, while others say it might challenge the US dollar’s role as the main world money.

Interest rate and green bonds

In May 2023, RMB interest rate swaps was launched. In June 2023, under the Government Green Bond Programme, the Government of the Hong Kong Special Administrative Region of the People's Republic of China (HKSAR) announced a green bonds offering, of approximately US$6 billion denominated in USD, EUR and RMB.

Issuance

Renminbi banknotes come in different values, like ¥0.1, ¥0.5, ¥1, up to ¥100. These values have been used since 1955, with some, like the ¥20 note, added later in 1999. Coins are also available, ranging from ¥0.01 to ¥1. Some smaller coins are used less often today as prices have gone up.

The numbers on the banknotes are shown in Chinese characters and Arabic numbers. Special designs are used to help people who are blind feel the value of each note. The Chinese yuan is also called different names in some areas, like "tugreg" in Inner Mongolia and "gor" in Tibet. The currency is made by a special company with factories all over China.

Economics

See also: Renminbi currency value

For most of its early history, the renminbi was pegged to the U.S. dollar at ¥2.46 per dollar. During the 1970s, it was revalued until it reached ¥1.50 per dollar in 1980. When China's economy gradually opened in the 1980s, the renminbi was devalued to help Chinese exports compete better. By 1994, the official exchange rate had increased to ¥8.62 per dollar.

In 2015, the People's Bank of China devalued the renminbi again. As of September 1, 2015, the exchange rate for US$1 was ¥6.38. The renminbi later reached a record high value of ¥6.0395 to the US dollar on January 14, 2014.

The renminbi has now moved to a managed floating exchange rate based on market supply and demand, with reference to a basket of foreign currencies. This helps China manage its economy and trade relationships.

Main article: Internationalization of the renminbi