The Chinese yuan is the official currency of the People's Republic of China.
The renminbi is the currency's name 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 ten 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 float.
In 2008, due to the Great Financial Crisis, the government limited yuan volatility by implementing an average rate fixed daily, which permitted limited fluctuation.
This is known as the yuan's band of floatation.
In November 2015, the IMF approved the yuan's inclusion in the basket of currencies that determine the value of the Special Drawing Rights (SDR).
This elite set of reserve currencies includes the U.S. dollar, the euro, the British pound, and the Japanese yen.
Yuan vs. Renminbi: An Overview
Chinese currency is a hot topic these days for many reasons. Not only does it define the state of one of the world's biggest economic superpowers, but it is also central to one of the most debated issues involving China today—its perceived mercantilist policy of artificial undervaluation of its currency against the U.S. dollar to give its exports an unfair price advantage.
There had been a consensus among economists that the Chinese currency has been undervalued in the 15% to 40% range for many years.1 However, the International Monetary Fund (IMF) stated in 2015 that the Chinese currency was no longer undervalued against the dollar, given its recent appreciation.2
Chinese money, however, comes by two names: the Yuan (CNY) and the people's renminbi (RMB). The distinction is subtle: while the renminbi is the official currency of China, where it acts as a medium of exchange, the yuan is the unit of account of the country's economic and financial system.