The Chinese government has announced that it will gradually increase the flexibility of the exchange rate. Since 2006, the renminbi exchange rate has been allowed to float in a narrow margin around a fixed base rate determined with reference to a basket of world currencies. However, more recently, appreciation actions by the Chinese government, as well as quantitative easing measures taken by the American Federal Reserve and other major central banks, have caused the renminbi to be within as little as 8% of its equilibrium value by the second half of 2012. It has previously been claimed that the renminbi's official exchange rate was undervalued by as much as 37.5% against its purchasing power parity. As China pursued its transition from central planning to a market economy and increased its participation in foreign trade, the renminbi was devalued to increase the competitiveness of Chinese industry. Until 2005, the value of the renminbi was pegged to the US dollar. The renminbi is issued by the People's Bank of China, the monetary authority of China. One yuan is divided into 10 jiao ( Chinese: 角 pinyin: jiǎo), and the jiao is further subdivided into 10 fen ( Chinese: 分 pinyin: fēn). The yuan ( Chinese: 元 or simplified Chinese: 圆 traditional Chinese: 圓 pinyin: yuán) is the basic unit of the renminbi, but the word is also used to refer to the Chinese currency generally, especially in international contexts. It is the world's 5th most traded currency as of April 2022. 'People's Currency' symbol: ¥ ISO code: CNY abbreviation: RMB) is the official currency of the People's Republic of China. The renminbi ( Chinese: 人民币 pinyin: Rénmínbì lit. " Renminbi" in Simplified (top) and Traditional (bottom) Chinese characters
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