CNY

Yuan Renminbi from China.

The renminbi is the official currency of the People's Republic of China. The People's Republic of China (PRC) comprises most of the cultural, historic, and geographic area known as China.

The renminbi was first issued shortly before the takeover of the mainland by the Communists in 1949. One of the first tasks of the new communist government was to end the hyperinflation that had plagued China near the end of the KMT era.

During the era of the command economy, the value of the RMB was set to unrealistic values in exchange with western currency and severe currency exchange rules were put in place. With the opening of the Chinese economy in 1978, a dual track currency system was instituted, with renminbi usable only domestically, and with foreigners forced to use foreign exchange certificates. The unrealistic levels at which exchange rates were pegged led to a strong black market in currency transactions.

In the late 1980s and early 1990s, the PRC worked to make the RMB more convertible. Through the use of swap centers, the exchange rate was brought to realistic levels and the dual track currency system was abolished.

Since 1994, the policy on currency has been to informally peg the value of the renminbi against the value of the United States dollar. This policy was praised during the Asian Financial Crisis of 1998 as it prevented a round of competitive devaluations.

In 2003, this policy came under criticism by the United States. The fall in the value of the dollar caused the value of the renminbi to also fall making Chinese exports more competitive. This led to some pressure on the PRC from the United States For other uses see United States to increase the value the RMB in order to encourage imports and decrease exports. This is a policy that some feel would preserve manufacturing jobs in the United States.