What it is
The currency of the People’s Republic of China. Renminbi, “the people’s currency”, is the name of the currency and yuan is its unit. It trades in two markets: on the mainland, under rules set by the authorities, and offshore, chiefly in Hong Kong.
Who issues it
The People’s Bank of China issues the renminbi. It works under the direction of the State Council and is not independent of the government in the way most of the central banks on this site are.
How it is commonly described
- Managed or pegged
- Its exchange rate is steered or fixed by the authorities and does not float freely.
- Reserve currency
- Held in quantity by central banks and governments as part of their foreign reserves.
- Emerging market
- Issued by a developing economy; usually a thinner market, with wider spreads and larger swings.
The yuan does not float freely: each trading day the central bank publishes a reference rate, and the mainland market may trade only within a band around it. Movement of money in and out of the country is controlled. It is nonetheless held in official reserves, and it is one of the five currencies in the International Monetary Fund’s Special Drawing Right.
These are descriptions people use, drawn from how the currency has commonly behaved. They are not promises about how it will behave.
What typically moves it
- The central bank’s daily reference rate and the band around it
- Chinese growth, trade and property-market conditions
- The gap between Chinese and US interest rates
- Controls on the movement of capital, and changes to them
- The general direction of the US dollar
These are the things people who follow this currency usually watch. They explain how the market works; they do not say what the exchange rate will do next.
The scheduled releases to know
- Loan Prime Rate announcementsPublished by People’s Bank of ChinaExplainer: Rates
- Gross Domestic ProductPublished by National Bureau of Statistics of ChinaExplainer: GDP
- Industrial production, retail sales and fixed-asset investmentPublished by National Bureau of Statistics of China
- Official purchasing managers’ indicesPublished by National Bureau of Statistics of ChinaExplainer: PMI
- Trade balancePublished by General Administration of CustomsExplainer: Trade balance
- Consumer and producer pricesPublished by National Bureau of Statistics of ChinaExplainer: CPI
No dates or figures are shown here: each publisher’s own calendar is the authority. The explainers are in Economic Events; a release without a link has no explainer on this site yet.
Its main session
Asia (Shanghai and Hong Kong hours). The mainland market keeps Shanghai hours and the reference rate is published each morning before it opens. The offshore yuan trades around the clock.
At GIO4X
A short history
The renminbi was first issued in December 1948, when the People’s Bank of China was founded. China unified its exchange rates in 1994 and then held the yuan effectively fixed to the US dollar until July 2005, when it moved to a managed float with reference to a basket of currencies. An offshore market grew up in Hong Kong from 2010, and the yuan joined the Special Drawing Right in 2016.
Words worth knowing
A reference page. Educational information, not investment advice or a recommendation to trade. It gives no exchange rate, no interest rate and no forecast.