Onshore RMB

Onshore RMB is renminbi (RMB) held and used within Mainland China's domestic banking and financial system. In foreign exchange markets it is quoted under the ISO code CNY. Onshore renminbi is subject to China's foreign exchange administration and capital controls, which govern how it can be converted into other currencies and moved across the border. It contrasts with offshore RMB, the renminbi held outside the Mainland and traded as CNH.

The onshore market is the core of the currency: it is where China's central bank sets policy, where most renminbi deposits are held and where the official exchange rate is formed.

The People's Bank of China (PBoC) is responsible for monetary policy and the exchange rate regime. The State Administration of Foreign Exchange (SAFE), which operates under the PBoC, administers foreign exchange rules, manages most of China's foreign exchange reserves and supervises how banks handle cross-border transactions. Interbank foreign exchange trading takes place through the China Foreign Exchange Trade System (CFETS) in Shanghai. For full institutional profiles, see the People's Bank of China regulator profile and the State Administration of Foreign Exchange regulator profile.

Each trading day the PBoC, through CFETS, publishes a central parity rate, often called the fixing, for the renminbi against the US dollar and other currencies. Onshore spot trading is allowed within a band around that fixing, which has been plus or minus 2 percent against the dollar since 2014. In August 2015 the PBoC changed the fixing method to give more weight to the previous day's closing rate, and the renminbi fell by about 2 percent within days, an event that unsettled global markets. Authorities have since used adjustments to the fixing, reserve requirements on foreign exchange deposits and other tools to manage the currency's movement. The renminbi has been part of the IMF's Special Drawing Rights basket since October 2016.

China accepted the IMF's obligations on current-account convertibility in 1996, meaning that payments for genuine trade in goods and services, income and transfers are permitted, subject to documentation. Capital-account transactions, such as foreign investment, cross-border lending and portfolio flows, remain subject to approvals, quotas and registration through designated channels. Individuals face an annual quota on purchases of foreign currency for personal use, commonly reported as the equivalent of 50,000 US dollars, and cannot use it for prohibited purposes such as overseas property purchases.

These capital controls are a key reason the onshore and offshore markets remain separate. They also reflect the trade-off described by the impossible trinity: China has preferred to keep a managed exchange rate and an independent monetary policy, at the cost of fully open capital flows. The degree of currency convertibility has increased gradually but remains limited.

Money moves between the onshore and offshore pools through permitted routes: trade settlement, approved investment schemes such as Stock Connect and Bond Connect, cross-border lending quotas, and the RMB clearing network. Cross-border renminbi payments are increasingly processed through CIPS. Because these routes are controlled, CNY and CNH prices can diverge; the gap is tracked as the CNY-CNH spread.

Foreign companies with Mainland subsidiaries hold onshore renminbi in Mainland bank accounts and must comply with SAFE rules when paying dividends, service fees or loan repayments abroad. Exporters in China generally must bring foreign currency earnings into the country under export proceeds repatriation rules, and banks check trade documents behind cross-border payments. Payment firms serving China must decide whether to settle onshore, through licensed Mainland partners, or offshore, where access is simpler but the funds remain outside the Mainland system. The e-CNY, China's central bank digital currency, is a form of onshore renminbi issued by the PBoC for domestic retail use.