Last Updated on: 12th February 2021, 01:55 pm
The Chinese yuan is the official currency of the People’s Republic of China. The renminbi is the name of the currency in China, where the yuan is the unit of currency.
Its ISO code is CNY although RMB can also be used.
The global importance of the yuan has increased over the last 10 years, in parallel with Chinese efforts to boost its use. It became the world’s 5th most traded currency in 2015.
The yuan was pegged to the dollar until 2005, when the People’s Bank of China decided to allow it to float.
In 2008, due to the Great Financial Crisis, the government limited yuan volatility by implementing an average rate, which is fixed daily, which limited fluctuation is permitted. This is known as the yuan’s band of floatation.
In November 2015, the IMF approved the inclusion of the yuan in the basket of currencies that determine the value of the Special Drawing Rights (SDR).
This elite set of reserve currencies also includes the U.S. dollar, the euro, the British pound, and the Japanese yen.
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