For many years, the renminbi was pegged to the U.S. dollar. In 2005, it was officially unpegged and as of April 2009, had an exchange rate of 6.8 RMB to $1 U.S. dollar.
The renminbi was first issued on December 1, 1948 by the Chinese Communist Party's People's Bank of China.
At that time, the CCP was deep into the civil war with the Chinese Nationalist Party, which had its own curency, and the first issuance of the renminbi was used to stabilize Communist held areas which assisted in a CCP victory.
After the defeat of the Nationalists in 1949, China's new government addressed the extreme inflation that plagued the old regime by streamlining its financial system and centralizing foreign exchange management.
In 1955, the People's Bank of China, now China's central bank, issued it's second series of the renminbi that replaced the first at a rate of one new RMB to 10,000 old RMB, which has remained unchanged since.
A third series of RMB was issued in 1962 which used multi-color printing technology and used hand-engraved printing plates for the first time.
In this period, the RMB's exchange value was unrealistically set with many western currencies which created a large underground market for foreign exchange transactions.
With China's economic reforms in the 1980s, the RMB was devalued and became more easily traded, creating a more realistic exchange rate. In 1987, a fourth series of RMB was issued featuring a watermark, magnetic ink and fluorescent ink.
In 1999, a fifth series of RMB was issued, featuring Mao Zedong on all notes.
Un-pegging the Renminbi:
From 1997 to 2005, the Chinese government pegged the RMB to the United States currency at about 8.3 RMB per dollar, despite criticisms from the United States.
On July 21, 2005, the People's Bank of China announced that it would lift the peg to the dollar and phase in a flexible mechanism of exchange rates. Following the announcement the RMB was reevaluated to 8.1 RMB per dollar.