The Renminbi came into force in October 1949 when the communist took power on the Chinese mainland. China has become the world's biggest exporter, second largest economy and biggest manufacturer in the world.
For most of its early existence, the Renminbi was pegged to the US Dollar. Its value gradually decline as China embarked on a new economic course during Deng Xiaoping's leadership and transformed into a more market capitalistic economy.
Since 2005, the Chinese government eliminated its policy of pegging the Renminbi to the US Dollar. The Renminbi has now been floating within a small margin to a basket of currencies selected by the Chinese government. This is seen as a move to a more fully free-market floating of the Renminbi. However the People's Bank of China have set a band of ±0.3 percent movement around the currency.
During the onset of the Global financial crisis, the Renminbi was unofficially repegged to the US Dollar.
The Renminbi has appreciated 22 percent since the mechanism reform in 2005 of the Yuan exchange rate.
The Chinese government has recognized the Renminbi needs to slowly increase to boost domestic consumptionIt has enacted a combination of interest rate hikes, reserve requirement hikes and currency appreciation to reduce inflation.

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