Chinese Yuan Renminbi CNY: Overview and History

This practical guide to money in China will help you prepare for your visit. The Chinese yuan lost value during the COVID-19 pandemic, largely due to reduced economic activity and strict lockdowns. The yuan suffered its largest-ever monthly price drop in April 2022, losing 7% of its value over three months.

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It maintained its value (at times being worth a little more than the yen) until 1925, when Zhang Zuolin’s military involvement in the rest of China lead to an increase in banknote production and a fall in the currency’s value. The currency lost most of its value in 1928 as a consequence of the disturbance following Zhang Zuolin’s assassination. The Fengtien yuan was only issued in banknote form, with 1, 5 and 10 yuan notes issued in 1917, followed by 50 and 100 yuan notes in 1924.

However, with China’s economic reforms and opening up to the global market in the late 20th century, the renminbi began to play a more prominent role in international trade and finance. Despite these developments, the currency remains subject to strict government regulations and capital controls. Banknotes in circulation come in Blockchain stocks one-, two-, five-, 10-, 20-, 50-, and 100-yuan denominations, as well as one-, two-, and five-jiao notes.

Alternative words

This hierarchical structure is similar to the system used in many other currencies, such as dollars and cents or pounds and pence. The Chinese yuan wasn’t considered an international currency for years because of the Chinese government’s rigid controls. This began to change as the Chinese government began to promote international use of the RMB. The largest banknote is 100 yuan, followed by 50 yuan, 20 yuan, 10 yuan, five yuan, and one yuan.

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When used in English in the context of the modern foreign exchange market, the Chinese yuan (CNY) refers to the renminbi (RMB), which is the official currency used in mainland China. Elena, a seasoned foreign exchange trader with a proven track record in the dynamic world of currency markets, brings a wealth of expertise and professionalism to the financial realm. Her disciplined approach to risk management ensures prudent investment strategies, instilling confidence in both colleagues and clients alike. An important aspect of the yuan’s international presence is the distinction between its onshore (CNY) and offshore (CNH) exchange rates. The onshore rate, CNY, is the rate at which the yuan is traded within mainland China. This rate is tightly controlled by the People’s Bank of China and reflects the official monetary policy.

Some of the banknotes were denominated in chuàn, strings of wén coins. The People’s Bank was founded in 1948 and began issuing currency that year, but some of the regional banks continued to issue their own notes in to 1949. In 1948, the Central Bank of China issued notes (some dated 1945 and 1946) in denominations of 1, 2 and 5 jiao, 1, 5, 10, 20, 50, and 100 yuan. In 1949, higher denominations of 500, 1000, 5000, 10,000, 50,000, 100,000, 500,000, 1,000,000 and 5,000,000 yuan were issued. The Central Bank of China issued notes in denominations of 1 and 5 fen, 1, 2 and 5 jiao, 1, 5 and 10 yuan. Approximately 1.376 trillion yuáns (5.5%) of the currency reserves exist in gold reserves.

• The People’s Bank of China (PBOC) was established during the Chinese Civil War.
• One yuan is equivalent to 10 jiao, and one jiao is equivalent to 10 fen.
• It is used in everyday transactions, similar to how dollars, euros, or pounds are used in their respective regions.
• The Chinese yuan lost value during the COVID-19 pandemic, largely due to reduced economic activity and strict lockdowns.
• The Chinese yuan renminbi is the currency used in the People’s Republic of China.

Limits tend to be set on how much RMB you can change to a foreign currency in a single day in China itself, and these limits may be fairly low. Whether you’re even able to do that is dependent on what foreign currencies that particular branch has available on that particular day. Travelers’ checks can be a secure solution if traveling for an extended period, but we now don’t recommend them as ATMs and currency exchange are easier and more readily available solutions.

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Production of banknotes by Communist Party forces ceased in 1936 but resumed in 1938 and continued through to the centralization of money production in 1948. Notes up to 5,000 yuan appeared in 1943, with 10,000 yuan notes appearing in 1947, 50,000 yuan in 1948 and 100,000 yuan in 1949. Between 1930 and 1948, banknotes were also issued by the Central Bank of China denominated in customs gold units. These, known as “gold yuan notes”, circulated as normal currency in the 1940s alongside the yuan.

Bank Account

• The remainder consists of foreign currencies, special drawing rights in the International Monetary Fund and other reserve positions.
• The largest banknote is 100 yuan, followed by 50 yuan, 20 yuan, 10 yuan, five yuan, and one yuan.
• The fifth series is now legal tender, leading to the prior ones being phased out.
• The price of the yuan is permitted to trade within 2% of that price.

The origins of China’s modern currency system can be traced back to the establishment of the People’s Bank of China (PBOC) in 1948. Before the renminbi, various regions in China used different currencies, leading to economic fragmentation and instability. The introduction of the renminbi aimed to unify the currency system under a single, stable monetary framework, facilitating trade and economic growth. The currency of China is referred to as either the Chinese yuan (CNY) or renminbi (RMB). The two terms are similar and are often used interchangeably. The currency allowed the new administration to unify the Chinese economy, which was then divided among several regional currencies.

Other regional mints were opened in the 1890s producing similar silver coins along with copper coins in denominations of 1, 2, 5, 10 and 20 cash. The central government began issuing its own coins in the yuan currency system in 1903. Banknotes were issued in yuan denominations from the 1890s by several local and private banks, along with banks established by the Imperial government. In 1917, the warlord in control of Manchuria, Zhang Zuolin, introduced a new currency, known as the Fengtien yuan or dollar, for use in the Three Eastern Provinces. It was valued at 1.2 yuan in the earlier (and still circulating) “small money” banknotes and was initially set equal to the Japanese yen.

Coins are also issued in one and five jiao, along with one-yuan denominations. In the aftermath of the Second World War and during the civil war which followed, Nationalist China suffered from hyperinflation, leading to the introduction of a new currency in 1948, the gold yuan. In the 1940s, larger denominations of notes appeared due to the high inflation. 500 yuan notes were introduced in 1941, followed by 1,000 and 2,000 yuan in 1942, 2,500 and 5,000 yuan in 1945 and 10,000 yuan in 1947.

The RMB acts as one of the most-held reserve currencies in the world, while being the eighth most-traded currency globally. The pound sterling is the name of the British currency itself, while pounds are a denomination of the pound sterling. You use pounds to purchase goods and services, not pounds sterling or sterling. Following this example, it’s important to remember that you can refer to the currency in general as the renminbi.

The dual exchange rate system allows for greater flexibility in international trade and investment while enabling the Chinese government to retain control over its domestic financial environment. The difference between CNY and CNH can be influenced by various factors, including market demand, economic conditions, and geopolitical events. The Chinese yuan renminbi is the official currency of mainland China.

The RMB is one of the top five most-used currencies in the 2020s, in addition to the U.S. dollar, euro, yen, and British pound. The IMF increased the weight of the yuan in its Special Drawing Rights (SDRs) basket in 2022, an international reserve asset that the IMF created as a supplement to member countries’ official reserves. The modern-day Chinese yuan uses the abbreviation CNY to distinguish between the mainland currency and other uses of the word. Not only did devaluing the CNY make Chinese goods more affordable and attractive in international markets, but there was also another advantage for China. It became the first emerging market currency included in the International Monetary Fund’s (IMF’s) special drawing rights (SDR) basket—a reserve currency used by the IMF.