Renminbi

From MarketsWiki

The renminbi - literally "people's currency" - or the yuan is the official currency in the mainland of the People's Republic of China (PRC). It is issued by the People's Bank of China, the monetary authority of the PRC. The official ISO 4217 abbreviation is CNY^[1], although also commonly abbreviated as "RMB."

Starting January 4, 2006, an OTC trading system has been introduced in the interbank spot foreign exchange market, while an electronic matching system is also retained at the same time; At 9:15 a.m. on each business day, the China Foreign Exchange Trading System (CFETS) releases the central rate for the RMB against the U.S. dollar, Euro, Japanese yen, and HK dollar for that day, and that exchange rate becomes the cetnral rate in the interbank spot foreign exchange market (including the OTC trading system and the electronic matching system )as well as at the bank counters^[2].

Before the market opening on each business day, the CFETS inquires all market makers prices quoates, after excluding the higherst and lowest prices, the weighted average of the remining prices becomes renminbi against U.S. dollar exchange rate for that day. The CFETS decides the weighting for averaging, based on a variety of indicators, such as the reporting bodies' transaction volume in the interbank foreign exchange market and pricing situation^[3].

References

1. ↑ ISO 4217 currency names and code elements. International Organization for Standardization. Retrieved on May 19, 2008.
2. ↑ Public Announcement of the People’s Bank of China on Further Improving the Inter-Bank Spot Foreign Exchange Market. China Foreign Exchange Trade System. Retrieved on May 19, 2008.
3. ↑ Trade Service. China Foreign Exchange Trade System. Retrieved on May 19, 2008.