The Renminbi (RMB) is the official currency of the People's Republic of China, issued by the country's monetary authority, the People's Bank of China (PBOC). The term renminbi translates to "the people's money," while the Yuan is the basic unit of the currency, similar to how the "pound" is the unit of "sterling" in the UK. The international ISO 4217 code for the currency is CNY.
The first series of the Renminbi was introduced by the People's Bank of China in December 1948, before the formal establishment of the People's Republic of China. The currency was created to unify the monetary system across Communist-controlled territories and to end the hyperinflation that plagued the country.
The RMB operates under a managed floating exchange rate regime, which was formally adopted in July 2005, replacing a de facto peg to the US dollar. Under this mechanism, the PBOC sets a daily central parity rate, and the currency is allowed to trade within a band, which was gradually widened to ±2.0% around the central parity rate. This system is based on market supply and demand with reference to a basket of currencies.
A key concept connected to the RMB is the distinction between the onshore currency (CNY) and the offshore version, unofficially coded as CNH, which is traded in markets like Hong Kong and is less restricted. The RMB's international role is also constrained by China's use of capital controls, which limit the free flow of money in and out of the country. A recent significant change occurred in the early 2020s with the launch of the digital renminbi (e-CNY), a central bank digital currency (CBDC), intended to enhance payment system resilience.