Are CNY and RMB the Same? China’s Currency Explained
Explore the distinctions and overlaps between the various terms used to refer to China's official currency.
Currencies serve as the fundamental medium of exchange, facilitating transactions and economic activity. They enable the valuation of goods, services, and assets. Understanding a country’s currency is a first step in comprehending its economic framework.
Renminbi The Official Currency
The official currency of the People’s Republic of China is known as the Renminbi, often abbreviated as RMB. This term directly translates to “people’s currency,” highlighting its role as the legal tender across mainland China. The People’s Bank of China, the nation’s central bank, holds the exclusive authority to issue and manage the Renminbi.
The Renminbi functions as the overarching name for China’s currency system, similar to how “Pound Sterling” refers to the currency of the United Kingdom. It represents the currency as a whole, encompassing all its units and denominations.
Yuan The Unit of Currency
While Renminbi is the official currency name, the “Yuan” serves as its basic unit. This is comparable to how “dollar” is the unit of the “US Dollar” currency. When prices are quoted or transactions occur, they are expressed in Yuan, such as “100 Yuan.”
One Yuan is further divided into smaller denominations. A single Yuan comprises 10 Jiao, and each Jiao is then subdivided into 10 Fen. Banknotes are issued in various Yuan and Jiao denominations, and coins are available for Yuan, Jiao, and Fen.
CNY The International Code and Its Nuances
“CNY” is the internationally recognized ISO 4217 currency code for the Chinese Yuan. This three-letter code, where “CN” represents China and “Y” stands for Yuan, is widely used in global financial markets, banking, and trade. It serves as a clear, standardized identifier for the currency in international contexts, much like “USD” is the code for the US Dollar.
When people inquire if CNY and RMB are the same, the answer is affirmative. Both terms refer to the same currency of mainland China, with RMB being the official name and CNY being the international code primarily used in financial reporting and foreign exchange. This distinction helps avoid confusion, especially when dealing with international transactions.
A nuance regarding the Renminbi in international markets is the distinction between onshore and offshore trading. CNY specifically refers to the Renminbi traded within mainland China, subject to its capital controls and regulations. An unofficial code, CNH, is used for the Renminbi traded in offshore markets, such as Hong Kong, where it operates with fewer restrictions and a more market-driven exchange rate.