It is no longer news that Nigeria has entered into a bilateral agreement to swap currencies with China for international trade purposes. In this piece, I intend to introduce you to the Chinese currency, the Renminbi.
Renminbi (RMB) is the official currency of the Chinese. Renminbi literally means, ‘people’s currency’. The Yuan, often used loosely as China’s currency is actually the primary unit of the renminbi. The relationship between renminbi and yuan is similar to the relationship between Britain’s Sterling and pound, the former being the official name of the currency and the latter being its primary unit. Other units of renminbi are the jiao and the fen mathematically represented below as:
1 yuan=10 jiao
1 jiao=10 fen
1 yuan=100 fen
The People’s Bank of China, China’s monetary authority issues and regulates the supply of renminbi. On October 1, 2016, the currency was included in the IMF’s special drawing rights basket making it a global reserve currency for the first time.
RMB is legal tender only in mainland China, but not in its Special Administrative Regions of Macau and Hong Kong. Even though both of these offshore China regions do not transact with the currency, it can be easily exchanged for the Hong Kong dollar and the Macanese Pataca. However, individuals and businesses can keep bank accounts denominated in RMB in both regions.
To be continued…