What is "renminbi"

currency introduced 1948 in China, from Chinese renminbi, from renmin "people" + bi "currency."

n. The official currency of the People's Republic of China

The renminbi is the official currency of the People's Republic of China. The name literally means "people's currency". The yuan ( sign: ¥) is the basic unit of the renminbi, but is also used to refer to the Chinese currency generally, especially in international contexts. 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 , and a jiao in turn is subdivided into 10 fen .

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, (or informally). The renminbi is legal tender in mainland China, but not in Hong Kong or Macau. Renminbi is sometimes 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. The currency 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 historical 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 (see below). More recently, however, appreciation actions by the Chinese government, as well as quantitative easing measures taken by the 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 in 2015. The yuan is scheduled to be included in the basket of currencies used by the IMF ( reserve currency) in 2016.