Renminbi Wikipedia

December 6, 2023 By admin

what is the name of chinese currency

The word renminbi came into use the same year the People’s Republic of China was founded, in 1949. The word yuan, however, is much older, and was originally used to refer to the silver coins that European merchants used to trade with Chinese merchants almost 500 years ago. Our currency rankings show that the most popular Chinese Yuan Renminbi exchange rate is the CNY to USD rate.

“I sometimes think that the whole renminbi/yuan issue is a sinister plot by the Chinese designed specifically to deter people from discussing Chinese currency policy,” he joked. Nobel-prize-winning economist Paul Krugman, writing in the New York Times in October, noted that no-one seemed to mind if you talked about the pound’s https://www.wallstreetacademy.net/ value, but talking about the yuan’s value would sometimes draw disapproval. In the second half of the 19th Century major trading nations starting producing their own “trade dollars”. “Renminbi” is the official name of the currency introduced by the Communist People’s Republic of China at the time of its foundation in 1949.

Thus, it would join the U.S. dollar, the euro, the British pound sterling, and the Japanese yen as one of the IMF’s Special Drawing Rights currencies used for intergovernmental loans. 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. Banknotes were issued in yuan denominations from the 1890s by several local and private banks, along with the Imperial Bank of China and the “Hu Pu Bank” (later the “Ta-Ch’ing Government Bank”), established by the Imperial government. During the Imperial period, banknotes were issued in denominations of 1, 2 and 5 jiao, 1, 2, 5, 10, 50 and 100 yuan, although notes below 1 yuan were uncommon.

what is the name of chinese currency

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. 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.

After the revolution, a great many local, national and foreign banks issued currency. Although the provincial coinages mostly ended in the 1920s, the provincial banks continued issuing notes until 1949, including Communist issues from 1930. Most of the banknotes issued for use throughout the country bore the words “National Currency”, as did some of the provincial banks. The remaining provincial banknotes bore the words “Local Currency”. These circulated at varying exchange rates to the national currency issues.

The Chinese character 圓 is also used to denote the base unit of the Hong Kong dollar, the Macanese pataca, and the New Taiwan dollar. The unit of a New Taiwan dollar is also referred to in Standard Chinese as yuán and written as 元 or 圓. There are currency exchange booths at most major airports in big cities, so you could bring a small amount of your own currency with you and exchange it at the airport when you arrive.

Related currency units

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate. China’s first domestically produced machine-struck dollar coin, or yuan, was minted in Guangdong province in 1890.

  1. Today, renminbi is the general name for the Chinese currency, while yuan is the name of a unit of that currency.
  2. 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.
  3. Once you’ve got your renminbi in hand, be sure to take some time to examine it and think about its history, its future and all the different ways there are to refer to it in both English and Chinese.
  4. This stringent management of the currency leads to a bottled-up demand for exchange in both directions.
  5. The word “yuan” is frequently used in Mandarin translations of foreign currencies.

China uses currency controls to maintain the value of the Chinese Yuan at a favorable level. Every day the PBOC sets a midpoint value against the U.S. dollar, based on previous trading sessions and movements in international currency markets. The price of the yuan is allowed to trade within 2% of that price. At times, the midpoint may also be adjusted based on undefined “counter-cyclical” factors. 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.

As a managed float, the Renminbi’s value is determined by a basket of foreign currencies. The ISO code for the renminbi is CNY, the PRC’s country code (CN) plus “Y” from “yuan”.[13] Hong Kong markets that trade renminbi at free-floating rates use the unofficial code CNH. This is to distinguish the rates from those fixed by Chinese central banks on the mainland.[14] The abbreviation RMB is not an ISO code but is sometimes used like one by banks and financial institutions.

Use as a currency outside mainland China

“Kuai” is colloquial, like “quid” in the UK and “buck” in the US, but it is the word used in everyday Mandarin, whether you are in Beijing or Taiwan – which, of course, has its own currency, the new Taiwanese dollar, also known as the yuan. The word they use is “kuai”, which literally means “piece”, and is the word used historically for coins made of silver or copper. In the world’s high-flying financial circles, the word “renminbi” (or RMB) is often preferred to “yuan” (or CNY, short for “Chinese Yuan”). The European merchants who started arriving in the early 16th Century went to China to buy silk and porcelain.

Issuance of the aluminium ¥0.01 and ¥0.02 coins ceased in 1991, with that of the ¥0.05 halting in 1994. The small coins were still struck for annual uncirculated mint sets in limited quantities, and from the beginning of 2005, the ¥0.01 coin got a new lease on life by being issued again every year since then up to present. In 1953, aluminium ¥0.01, ¥0.02, and ¥0.05 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 stalks on the reverse (back).

what is the name of chinese currency

The term Chinese yuan renminbi (CNY) refers to the currency used in the People’s Republic of China. Although it may seem a little confusing because the names are often depicted together, they’re actually two separate terms. A yuan acts as China’s unit of account for its financial system and economy, which represents a single unit of money.

Depegged from the US dollar

If you find the difference between currency and units confusing, it might seem like a good idea to figure out which word for money is most popular in China and use that one. There is, in fact, very little practical difference between the terms RMB (renminbi) and CNY (Chinese yuan), and you will often hear these two words used interchangeably. Confusingly, however, it’s possible that you may also have heard Chinese money referred to as “yuan” (元 yuán), commonly abbreviated as CNY (“Chinese Yuan”).

Futures market

When China’s economy gradually opened in the 1980s, the renminbi 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 US$1 from 1997 to 2005. As of 2019, renminbi banknotes are available in denominations from ¥0.1, ¥0.5 (1 and 5 jiao), ¥1, ¥5, ¥10, ¥20, ¥50 and ¥100. These denominations have been available since 1955, except for the ¥20 notes (added in 1999 with the fifth series) ¥50 and ¥100 notes (added in 1987 with the fourth series).

How Many Renminbi Are There In a Dollar?

The Sichuan-Shaanxi Soviet issued copper 200 and 500 wen and silver 1 yuan coins. The yuan was derived from the Spanish dollar or Mexican dollar, worth eight Spanish reales and popularly known as the piece-of-eight. This was effectively the world’s first international currency, beginning to circulate widely in east and southeast Asia in the late 18th century due to Spanish presence in the region, principally the Philippines and Guam. Chinese paper money comes in denominations of one, five, ten, twenty, fifty and one hundred. China has the world’s second largest economy and Chinese money plays an increasingly important role in global financial transactions. That said, there’s still a great deal of confusion when it comes to Chinese currency.

In 2022, the IMF increased the weight of the yuan in its Special Drawing Rights basket—an international reserve asset that the IMF created as a supplement to member countries’ official reserves. The largest banknote is 100 yuan, followed by 50 yuan, 20 yuan, 10 yuan, 5 yuan, and 1 yuan. There are 10 jiao in a yuan (like dimes in a dollar) and 10 fen in a jiao. The Republic of China, which governs Taiwan, believes wide usage of the renminbi would create an underground economy and undermine its sovereignty.[88] Tourists are allowed to bring in up to ¥20,000 when visiting Taiwan. 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.