section_path: Financial and banking system/Currency system
section_name: Currency system
paragraph_text: Currency system
  
  The renminbi ("people's currency") is the currency of China, denominated as the yuan, subdivided into 10 jiao or 100 fen. The renminbi is issued by the People's Bank of China, the monetary authority of China. The ISO 4217 abbreviation is CNY, although also commonly abbreviated as "RMB". As of 2005, the yuan was generally considered by outside observers to be undervalued by about 30–40%. However, in 2017, the IMF stated that the yuan was correctly valued.
  
  The renminbi is held in a floating exchange-rate system managed primarily against the US dollar. On 21 July 2005, China revalued its currency by 2.1% against the US dollar and, since then has moved to an exchange rate system that references a basket of currencies and has allowed the renminbi to fluctuate at a daily rate of up to half a percent.
  
  There is a complex relationship between China's balance of trade, inflation, measured by the consumer price index and the value of its currency. Despite allowing the value of the yuan to "float", China's central bank has decisive ability to control its value with relationship to other currencies. Inflation in 2007, reflecting sharply rising prices for meat and fuel, is probably related to the worldwide rise in commodities used as animal feed or as fuel. Thus rapid rises in the value of the yuan permitted in December 2007 are possibly related to efforts to mitigate inflation by permitting the renminbi to be worth more. An article published in International Review of Economics & Finance in 2010 by Mete Feridun (University of Greenwich Business School) and his colleagues provide empirical evidence that financial development fosters economic growth in China.
  
  During the week of 10 August 2015, against the background of a slowing Chinese economy and appreciation of the U.S. dollar, the People's Bank of China devalued the renminbi by about 5%. The devaluation was accomplished by pegging the official rate to closing market rates. A market-based "representative" exchange rate against the U.S. dollar is one of the requirements for designation of a currency as one with Special Drawing Rights (SDR) by the International Monetary Fund (IMF), one of China's goals. Since the late-2000s, China has sought to internationalize the renminbi. As of 2013, the RMB is the 8th most widely traded currency in the world. In November 2015 in advance of G-20 and IMF meetings, IMF director Christine Lagarde announced her support for adding the yuan to the SDR currency basket. The announcement gave 'green-light' to official approval at 30 November IMF meeting. The internationalization of the Chinese economy continues to affect the standardized economic forecast officially launched in China by the Purchasing Managers Index in 2005.
  
  The renminbi ("people's currency") is the currency of China, denominated as the yuan, subdivided into 10 jiao or 100 fen. The renminbi is issued by the People's Bank of China, the monetary authority of China. The ISO 4217 abbreviation is CNY, although also commonly abbreviated as "RMB". As of 2005, the yuan was generally considered by outside observers to be undervalued by about 30–40%. However, in 2017, the IMF stated that the yuan was correctly valued.
  
  The renminbi is held in a floating exchange-rate system managed primarily against the US dollar. On 21 July 2005, China revalued its currency by 2.1% against the US dollar and, since then has moved to an exchange rate system that references a basket of currencies and has allowed the renminbi to fluctuate at a daily rate of up to half a percent.
  
  There is a complex relationship between China's balance of trade, inflation, measured by the consumer price index and the value of its currency. Despite allowing the value of the yuan to "float", China's central bank has decisive ability to control its value with relationship to other currencies. Inflation in 2007, reflecting sharply rising prices for meat and fuel, is probably related to the worldwide rise in commodities used as animal feed or as fuel. Thus rapid rises in the value of the yuan permitted in December 2007 are possibly related to efforts to mitigate inflation by permitting the renminbi to be worth more. An article published in International Review of Economics & Finance in 2010 by Mete Feridun (University of Greenwich Business School) and his colleagues provide empirical evidence that financial development fosters economic growth in China.
  
  During the week of 10 August 2015, against the background of a slowing Chinese economy and appreciation of the U.S. dollar, the People's Bank of China devalued the renminbi by about 5%. The devaluation was accomplished by pegging the official rate to closing market rates. A market-based "representative" exchange rate against the U.S. dollar is one of the requirements for designation of a currency as one with Special Drawing Rights (SDR) by the International Monetary Fund (IMF), one of China's goals. Since the late-2000s, China has sought to internationalize the renminbi. As of 2013, the RMB is the 8th most widely traded currency in the world. In November 2015 in advance of G-20 and IMF meetings, IMF director Christine Lagarde announced her support for adding the yuan to the SDR currency basket. The announcement gave 'green-light' to official approval at 30 November IMF meeting. The internationalization of the Chinese economy continues to affect the standardized economic forecast officially launched in China by the Purchasing Managers Index in 2005.
  
  The renminbi ("people's currency") is the currency of China, denominated as the yuan, subdivided into 10 jiao or 100 fen. The renminbi is issued by the People's Bank of China, the monetary authority of China. The ISO 4217 abbreviation is CNY, although also commonly abbreviated as "RMB". As of 2005, the yuan was generally considered by outside observers to be undervalued by about 30–40%. However, in 2017, the IMF stated that the yuan was correctly valued.
  
  The renminbi is held in a floating exchange-rate system managed primarily against the US dollar. On 21 July 2005, China revalued its currency by 2.1% against the US dollar and, since then has moved to an exchange rate system that references a basket of currencies and has allowed the renminbi to fluctuate at a daily rate of up to half a percent.
  
  There is a complex relationship between China's balance of trade, inflation, measured by the consumer price index and the value of its currency. Despite allowing the value of the yuan to "float", China's central bank has decisive ability to control its value with relationship to other currencies. Inflation in 2007, reflecting sharply rising prices for meat and fuel, is probably related to the worldwide rise in commodities used as animal feed or as fuel. Thus rapid rises in the value of the yuan permitted in December 2007 are possibly related to efforts to mitigate inflation by permitting the renminbi to be worth more. An article published in International Review of Economics & Finance in 2010 by Mete Feridun (University of Greenwich Business School) and his colleagues provide empirical evidence that financial development fosters economic growth in China.
  
  During the week of 10 August 2015, against the background of a slowing Chinese economy and appreciation of the U.S. dollar, the People's Bank of China devalued the renminbi by about 5%. The devaluation was accomplished by pegging the official rate to closing market rates. A market-based "representative" exchange rate against the U.S. dollar is one of the requirements for designation of a currency as one with Special Drawing Rights (SDR) by the International Monetary Fund (IMF), one of China's goals. Since the late-2000s, China has sought to internationalize the renminbi. As of 2013, the RMB is the 8th most widely traded currency in the world. In November 2015 in advance of G-20 and IMF meetings, IMF director Christine Lagarde announced her support for adding the yuan to the SDR currency basket. The announcement gave 'green-light' to official approval at 30 November IMF meeting. The internationalization of the Chinese economy continues to affect the standardized economic forecast officially launched in China by the Purchasing Managers Index in 2005.