Usually, a country's currency will be traded in domestic and international markets. The currency traded in China is called onshore currency, and the currency traded in the international market is called offshore money. Offshore RMB is the RMB traded in the international financial market.
The offshore RMB market is developed to meet the demand of overseas investors for RMB and facilitate their RMB trading and investment. With the rising status of China in the global economy, the importance of RMB in the international financial market is increasingly prominent. Therefore, the offshore RMB market is of great significance for promoting the internationalization of RMB.
It should be noted that there may be differences between the exchange rates of offshore RMB and onshore RMB, which are mainly caused by the differences in market environment, policies and regulations, and supply and demand relations between the two places. Therefore, in offshore RMB trading, we should pay attention to exchange rate fluctuations to reduce exchange rate risks.