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Title: Non-residents held more shares in French CAC 40 companies in 2021
[La transmission des variations du taux de change aux prix des importations en France : le rôle des monnaies de facturation]

Author

Listed:
  • Antoine Berthou
  • Julia Schmidt

Abstract

The US dollar is widely used in global trade to facilitate international transactions. In France, nearly 60% of France’s non-EU imports are invoiced in US dollars every year. Thus, taking account of US dollar invoicing in international transactions can lead to a change in the estimation of exchange rate pass-through to import prices. In particular, the depreciation of the nominal effective exchange rate (NEER) since January 2021 is greater when it is calculated using the weight of invoicing currencies rather than the weight of bilateral trade. In this episode in which the euro has depreciated more against the US dollar than against other currencies, conventional measures of the NEER based on weighting by bilateral trade flows tend to underestimate the pass-through of the exchange rate shock to import prices Le dollar américain est largement utilisé dans le commerce mondial pour faciliter les transactions internationales. En France, près de 60 % des importations françaises extracommunautaires sont facturées en dollars US chaque année. Ainsi, la prise en compte de la facturation en dollars US dans les transactions internationales peut conduire à modifier l’évaluation de la transmission des mouvements du taux de change aux prix des importations. En particulier, la dépréciation du taux de change effectif nominal (TCEN) depuis janvier 2021 est plus forte lorsque celui-ci est calculé en utilisant le poids des monnaies de facturation plutôt que le poids des échanges bilatéraux. Dans cet épisode où l’euro se déprécie davantage vis-à-vis du dollar US que des autres monnaies, les mesures conventionnelles du TCEN fondées sur les pondérations par les flux commerciaux bilatéraux ont tendance à sous-estimer la transmission du choc de taux de change aux prix à l’importation.

Suggested Citation

  • Antoine Berthou & Julia Schmidt, 2022. "Title: Non-residents held more shares in French CAC 40 companies in 2021 [La transmission des variations du taux de change aux prix des importations en France : le rôle des monnaies de facturation]," Bulletin de la Banque de France, Banque de France, issue 242.
    • Handle: RePEc:bfr:bullbf:2022:242:06
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    References listed on IDEAS

    as
    1. Natalie Chen & Wanyu Chung & Dennis Novy, 2022. "Vehicle Currency Pricing and Exchange Rate Pass-Through," Journal of the European Economic Association, European Economic Association, vol. 20(1), pages 312-351.
    2. Mary Amiti & Oleg Itskhoki & Jozef Konings, 2022. "Dominant Currencies: How Firms Choose Currency Invoicing and Why it Matters," The Quarterly Journal of Economics, Oxford University Press, vol. 137(3), pages 1435-1493.
    3. Giancarlo Corsetti & Meredith Crowley & Lu Han, 2020. "Invoicing and Pricing-to-market: Evidence on international pricing by UK exporters," Working Papers 202007, University of Liverpool, Department of Economics.
    4. Berthou, Antoine & Horny, Guillaume & Mésonnier, Jean-Stéphane, 2022. "The real effects of invoicing exports in dollars," Journal of International Economics, Elsevier, vol. 135(C).
    5. Boz, Emine & Casas, Camila & Georgiadis, Georgios & Gopinath, Gita & Le Mezo, Helena & Mehl, Arnaud & Nguyen, Tra, 2022. "Patterns of invoicing currency in global trade: New evidence," Journal of International Economics, Elsevier, vol. 136(C).
    6. Berthou, Antoine & Horny, Guillaume & Mésonnier, Jean-Stéphane, 2022. "The real effects of invoicing exports in dollars," Journal of International Economics, Elsevier, vol. 135(C).
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