We are delighted to announce that Indigo FX now offers businesses the ability to make payments in CNY also known as Renminbi. The beneficiary of a CNY payment to China must be a company incorporated in mainland China. According to the Economic Complexity Index, China is the world’s largest exporter of goods. China has many dominant industries like electronic equipment, oil, machines, vehicles, organic chemicals, copper, oil seed etc which has helped it to be quickly grow into a ‘trading giant’.
The Chinese Yuan Renminbi is the national currency of China, although foreign trade is done in US Dollar. People are confused when it comes to the renminbi(RMB) and the Yuan. Let’s shed more light on this. Actually, the renminbi is the official currency of China while the yuan is just a unit of that currency. The Chinese government was in control of the supply of the currency so as to keep its currency aligned with the U.S Dollar. Things started to change since 2006, the renminbi was split into onshore and offshore versions. And, since 2009, the Chinese government removed the restrictions to send payments in RMB, which allowed Chinese businesses to have more payment options.
Some interesting facts about the Chinese currency:
- Chinese currency is also known as Chinese money, Chinese Yuan (CNY) or Reminbi (RMB). Renminbi literally means “People’s Currency” or “People’s Money” and it is the official currency of the People’s Republic of China. The symbol for Renminbi is ¥.
First Paper Money
- Chinese people invented the first paper money in the ninth century, but the base unit of currency remained the copper coin. Learn about the Four Great Inventions of the Ancient Chinese
- The People’s Republic of China officially first issued the Renminbi (RMB) in December 1948.
The People’s Bank of China
- The People’s Bank of China (Zhongguo Renmin Yinhang in Chinese) has exclusive authority to issue and print currency.
- In 1989, the Reminbi had an exchange rate of 13.5 RMB (CNY) to 1 USD (US dollar) on the market. Today, RMB has the current rate as of 8.59 Chinese Yuan to 1 GBP dollar approx (Feb 2017)
Hong Kong and Macau
- Reminbi (RMB) is the legal tender in mainland China, but not in Hong Kong and Macau. The special administrative regions of Hong Kong use the Hong Kong Dollar, and Macau use the Macanese pataca.
China is now the most expensive major currency corridor, according to the World Bank, with the average cost of sending $200 (£140) from the UK to China standing at a staggering US $19.6 (£13.70). The global economy is slowing down (sparked by shrinking growth in China and dropping oil prices) which had a massive impact on currency markets. Both Sterling and the US dollar have been sensitive to these unravelling trends and the GBP/USD exchange rate has been very volatile since last year. If anything, the bigger risk to the market is how Trump’s plans will affect the dollar. And this is set to continue across the pond with Brexit, the French and German elections coming up.
When exchange rates are changing so dramatically between the date of a purchase agreement and the date of payment the uncertainty surrounding the true cost of your stock can make imports a high-risk option. Indigo FX offers a variety of market tools to ensure your business is protected from currency depreciation and remove any element of risk when importing.
If you are planning to make a currency exchange involving the Yuan, it’s well worth your time getting in contact with us to ensure you make a well-informed decision on when to make that transfer, as well as benefiting from highly competitive exchange rates.