![]() Especially with global inflation pressures rising sharply in recent months. “For instance, when the Evergrande news broke. The system is underwritten and enforced by foreign exchange reserves that were valued at a little over $3.2trn in September.īMO’s Gallo and colleagues suggest the PBoC may have encouraged the fall in USD/CNH because of a possible preference for avoiding outcomes that might lead the dollar to strengthen by more than it has in recent months. The managed float regime means that renminbi pairs sometimes reflect the activity of the PBoC in addition to market supply and demand. “In as much as China's fundamentals haven't been screaming ‘Get long of the RMB’ I've done my level best to classify the move in dollar China you described not as a growth and reflationary RMB rally, but more as an FX management RMB rally,” said Stephen Gallo, European head of FX strategy at BMO Capital Markets, in an October podcast. Some of the explanations offered for why the Chinese currency may have strengthened point to the involvement of the Peoples’ Bank of China (PBoC), which is responsible for the country’s “ managed floating exchange rate regime”. “The feedback loop between yuan weakness and market confidence (which became a vicious cycle in 2015-16 and during the US-China trade war) is one channel of contagion that China’s leaders are likely monitoring.” This was all before official figures confirmed a further slowdown in the pace of GDP growth in China for the third-quarter. In the meantime, sentiment toward China’s economy has deteriorated after the high profile troubles of China Evergrande Group stoked concerns about the overall real estate market, just as investors were attempting to come to terms with major changes in government economic policy. The rouble and the krone have also benefited from central bank decisions to lift interest rates in Russia and Norway, respectively, but no such developments have been forthcoming in China. CNY has shown amazing resiliency,” Chong wrote in an October 20 note.”Ĭanada’s dollar, Norway’s krone and Russia’s rouble have been helped in 2021 by high commodity prices that bolstered trade surpluses and added to GDP, but the commodity rally has been an issue for China, given that it is a net importer of raw materials and energy. “Our previous commentaries presented a case for downside yuan risk motivated by a domestic easing cycle and regional FX outflows – but this has not materialized. “The strength of the Chinese yuan, in our opinion, has been one of the most counterintuitive macro dynamics this year,” said Wee Khoon Chong, a senior APAC markets strategist at BNY Mellon. Only the Canadian dollar and Norwegian krone have outperformed the renminbi, when it comes to currencies in advanced economies.Įach of those currencies has benefited significantly from either the commodity price rally or the tailwinds of rising central bank interest rates – but those are not supportive factors for RMB. Of all the emerging market currencies, only the Russian rouble and South African rand have done better than the renminbi. The RMB was up close to 2% against the US Dollar for October 2021, when measured by the offshore USD/CNH exchange rate, making it one of the year’s strongest currencies. The renminbi is currently one of the strongest currencies on the market (27 October), although some analysts think this strength is unlikely to last much longer. USD/CNH has been unfazed by the whirlwind of negative sentiment about China’s economy. The yuan is the basic unit of the renminbi, in much the same way as the British pound is sometimes referred to as ‘pound sterling’. RMB is sometimes used to describe either or both CNH and CNY, both of which can be referred to as either the "renminbi" or the "yuan”. RMB currency stands for renminbi, which means “people’s money” in Chinese. CNY is used only inside China’s economic and financial system. Only CNH can be traded on international markets outside of China. The world’s second-largest economy has two separate currencies, CNH and CNY. Worst exchange rate of March 2021: 6.4659, Best exchange rate of March 2021: 6.5718, Average exchange rate in March 2021: 6.Source: Shutterstock What is RMB currencyĬhinese currencies and the way they’re organised may seem confusing at first. Worst exchange rate of February 2021: 6.4351, Best exchange rate of February 2021: 6.4884, Average exchange rate in February 2021: 6.4643 Worst exchange rate of January 2021: 6.4278, Best exchange rate of January 2021: 6.5332, Average exchange rate in January 2021: 6.4843 US Dollar to Chinese Yuan Monthly Exchange Rates Converting US Dollar (USD) to Chinese Yuan (CNY) in 2021 with the best, worst and average exchange rates of the year Table of 1 US Dollar to Chinese Yuan Exchange Rate:
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