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Measuring the International Influence of the RMB and its Regional Heterogeneity: Theory and Evidence from the Global FX Market Network.

Authors :
Wang, Panpan
Liu, Xiaoxing
Wu, Sixu
Ho, Tsungwu
Xie, Changqian
Source :
Emerging Markets Finance & Trade; 2024, Vol. 60 Issue 11, p2389-2403, 15p
Publication Year :
2024

Abstract

This study assesses the global and cross-regional influence of China's currency, the renminbi (RMB). We first develop a theoretical framework to determine the channel through which progress in RMB internationalization can be mapped onto the market influence of the RMB exchange rate on that of other currencies. Using a volatility connectedness approach, we then construct a series of spillover indices reflecting the international influence of the RMB. We find that the RMB's influence is worldwide but is smaller than that of major international currencies, such as the US dollar. Overall, the RMB has basically become a peripheral currency in Greater China, Central Asia, Eastern Europe, and some South Asian economies. Because of the Belt and Road initiative, regionalization of the RMB has also progressed in developing economies; however, China still has far to go in fully achieving internationalization of its currency. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
1540496X
Volume :
60
Issue :
11
Database :
Complementary Index
Journal :
Emerging Markets Finance & Trade
Publication Type :
Academic Journal
Accession number :
179084865
Full Text :
https://doi.org/10.1080/1540496X.2024.2318313