CNY (Onshore RMB)

Onshore Renminbi (CNY) refers to the Renminbi used for transactions and settlement within mainland China. Its exchange rate is influenced by the managed floating exchange rate system administered by the People's Bank of China, with a central parity rate formed daily in the interbank foreign exchange market and allowed to fluctuate within a certain band. Compared with offshore Renminbi (CNH), the CNY market is subject to stricter regulation, and the capital account is not yet fully open, so exchange rates and interest rates often differ from those of CNH. Foreign trade practitioners involved in cross-border trade settlement, foreign exchange conversion, and exchange rate risk management need to clearly distinguish between CNY and CNH: if a transaction occurs within mainland China and uses domestic bank accounts for receipt and payment, the CNY exchange rate usually applies; if Renminbi transactions are conducted in offshore markets such as Hong Kong or Singapore, the CNH exchange rate applies. Note that the CNY exchange rate is greatly affected by policy, so enterprises should pay attention to the central bank's central parity rate and fluctuation band, and reasonably use tools such as forwards and swaps to lock in exchange rate risk. At the same time, contracts should clearly specify whether the pricing currency is CNY or CNH to avoid disputes arising from exchange rate differences.