Apr 13, 2013

Renminbi and Sterling

Now that Australia joins a host of nations that are bypassing the US Dollar as the world's "reserve currency" and trading currency directly with China, I thought it might be good to discuss confusion about the name of the Chinese currency.

Renminbi is the name of China’s currency, but yuan is the denomination of bills. It is equivalent to Britain’s currency, which is sterling with its pound as denomination of bills. The number of renminbi per dollar or sterling per dollar is incorrect. Renminbi and Sterling are the currency, but not a unit of the currency.  Prices and exchanges are measured in yuan and pounds, not Renminbi or Sterling.

The primary unit of renminbi is the yuan. One yuan is subdivided into 10 jiao , which is subdivided into 10 fen. Renminbi banknotes are available in denominations from 1 jiao to 100 yuan and coins have denominations from 1 fen to 1 yuan.

During the past two years - China and Japan economies bypass dollar and engage in direct currency trade, China and Russia drop dollar for direct trade, China and Iran bypass dollar, India and Japan bypass dollar, Iran and Russia replace dollar with rial and ruble in trade, India and Iran transact directly in rupees, Brazil bypasses dollar for direct China currency, Australia and China bypass dollar for direct currency trade.