Why is CNY a restricted currency?

Answer 1

The Chinese Yuan (CNY) is considered a restricted currency primarily due to the Chinese government's strict capital controls and regulatory policies aimed at maintaining economic stability and managing foreign exchange rates. These controls limit the ability of individuals and institutions to freely convert the Yuan into other currencies, thus restricting the flow of capital in and out of China. This approach helps to mitigate risks associated with currency speculation and financial volatility, allowing the government to maintain greater control over its monetary policy.