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The official currency forming the monetary system backbone is renminbi having its base unit as yuan. It is the most vital currencies of the most fast developing nations in the world.
The term ‘Renminbi’ meant ‘people’s money’ in the Chinese native language. Yuan means a round object and is used to refer the base of any currency. The subdivisions are Jiao and fen and in some places Chinese Yuan is also known as ‘kuai’ and jiao as ‘mao’. The ISO code is 4217 and the numeric 156.
Chinese economy is supported by its advancement and economic growth. Earlier renminbi was pegged unofficially to the U.S. dollar under the regime of fixed rate. This promoted the currency strength, but the floating rate regime had to be changed recently owing to resistance from the USA and other G7 as well as European countries.
China argued that revaluation of their currency implies to increase in the currency value and the exports would become less competitive resulting in unemployment. In fact, this would bring a threat of currency risks.
But, now the Chinese currency is pegged to foreign currencies including United States dollar, Japanese yen, Australian dollar, South Korean won, Thai baht, and more. The purchase power is 1-8 Chinese Yuan currency = 1 US dollar.
Sovereign credit ratings present a significant role in determining the international capital markets access and also help in fostering dramatic growth, stability, besides efficiency of international as well as domestic markets.
However, the Chinese yuan and the U.S.dollar relationship will be interesting in the next decade as these international giants economies are becoming intertwined increasingly.
Chinese Yuan employs the decimal system and fen and jiao are the subunits. 1 yuan =10 equal jiao and 1 jiao=10 equal fen and1 yuan = 100 fen. The currency coins denominations issued by the mints are 1, 2, 5 fen and 1, 5 jiao and 1 yuan.
The Chinese currency is available in banknotes currently are 1, 2, 5 jiao, and yuan in 1, 2, 5,10,20,50 and 100. The 50 and 100 yuan faces problems and owing to this various preventive measures and security is taken to counter this problem.