Over the past two decades, the Chinese Yuan (RMB) has experienced considerable fluctuations. From 2000 to 2023, various economic factors and government policies have caused the value of the RMB to oscillate. Now, suppose you’re considering an investment in the RMB, or perhaps you’ve already invested. What might the outcomes be? Will you see a profit? Let’s delve into these questions and explore the potential scenarios.
Let’s consider a scenario where you have $100. If you decided to invest this amount in the Chinese Yuan (RMB) each year from 2000 to 2023, what would have happened? Let’s delve into this hypothetical situation and explore the potential outcomes.
| Year | price of 1 RMB, RMB/USD (dollar) | Price of 100 dollar (RMB) | Sell RMB to USD in 2023 | ROI (%) |
| 2000 | 0.1210 | 826.45 | $117.19 | 17.19% |
| 2001 | 0.1210 | 826.45 | $117.19 | 17.19% |
| 2002 | 0.1210 | 826.45 | $117.19 | 17.19% |
| 2003 | 0.1210 | 826.45 | $117.19 | 17.19% |
| 2004 | 0.1210 | 826.45 | $117.19 | 17.19% |
| 2005 | 0.1239 | 807.10 | $116.06 | 16.06% |
| 2006 | 0.1282 | 780.03 | $112.84 | 12.84% |
| 2007 | 0.1317 | 759.30 | $107.73 | 7.73% |
| 2008 | 0.1317 | 759.30 | $98.30 | -1.70% |
| 2009 | 0.1317 | 759.30 | $96.74 | -3.26% |
| 2010 | 0.1500 | 666.67 | $95.76 | -4.24% |
| 2011 | 0.1575 | 634.92 | $91.52 | -8.48% |
| 2012 | 0.1602 | 624.22 | $89.33 | -10.67% |
| 2013 | 0.1647 | 607.16 | $87.11 | -12.89% |
| 2014 | 0.1608 | 621.89 | $87.25 | -12.75% |
| 2015 | 0.1542 | 648.51 | $88.92 | -11.08% |
| 2016 | 0.1440 | 694.44 | $94.19 | -5.81% |
| 2017 | 0.1532 | 652.74 | $95.62 | -4.38% |
| 2018 | 0.1454 | 687.76 | $93.91 | -6.09% |
| 2019 | 0.1429 | 699.79 | $97.87 | -2.13% |
| 2020 | 0.1530 | 653.59 | $97.73 | -2.27% |
| 2021 | 0.1573 | 635.73 | $91.38 | -8.62% |
| 2022 | 0.1450 | 689.66 | $95.23 | -4.77% |
| 2023 | 0.1410 | 709.22 | $100.00 | 0.00% |
The ROI (Return on Investment) is calculated as (Value in 2023 - Initial Investment) / Initial Investment * 100%. For example, for the year 2000, the ROI is ($117.19 - $100) / $100 * 100% = 17.19%.
If you had invested in the RMB in 2000, your investment would have seen various periods of appreciation and depreciation. The value of the RMB against the US dollar has generally decreased from 8.28 in 2000 to 7.07 in 2023. This means that if you had bought RMB with US dollars in 2000 and sold them in 2023, you would have made a profit.
But if we look at the last 10 years (from 2014 to 2023), we see that the RMB has generally depreciated against the USD. This means that if you had invested in the RMB during this period, your investment would likely have decreased in value. For example, an investment made in 2014 would have resulted in a negative ROI of -12.75%.
Similarly, if we look at the last 5 years (from 2019 to 2023), the RMB has also generally depreciated against the USD. An investment made in 2019 would have resulted in a negative ROI of -2.13%.
So Should I invest on RMB or Chinese Yuan?
However, investing in foreign currency is not without risks. The value of the RMB is influenced by many factors, including China’s economic performance, government policies, and global economic conditions. Therefore, the return on investment (ROI) can vary greatly depending on these factors.
Looking forward to 2024, some analysts predict that the RMB could remain weak against the US dollar. However, some analysts suggest that exchange rates exceeding 8 RMB per USD are not out of the question in 2023 or 2024. It is my hope that this analysis will assist you in determining whether an investment in the Chinese Yuan (RMB) aligns with your financial goals.
