On the inclusion of the Chinese renminbi in the SDR basket
AbstractWe study the impact of a broadening of the SDR basket to the Chinese currency on the composition and volatility of the basket. Although, in the past, RMB inclusion would have had negligible impact due to its limited weight, a much more significant impact can be expected in the next decades, and more so if the Chinese currency is pegged to the US dollar. If the objective is to reinforce the attractiveness of the SDR as a unit of account and a store of value through more stability, then a broadening of the SDR to the RMB could be appropriate, provided some flexibility is introduced in the Chinese exchange-rate regime. This issue of flexibility is de facto more important than that of “free usability” to make the SDR more stable, at least in the short and medium run.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 12079.
Length: 39 pages
Date of creation: Nov 2012
Date of revision:
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SDR; renminbi; international monetary system; foreign exchange volatility.;
Other versions of this item:
- Agnès Bénassy-Quéré & Damien Capelle, 2011. "On the Inclusion of the Chinese Renminbi in the SDR Basket," Working Papers 2011-19, CEPII research center.
- Agnes Benassy-Quere & Damien Capelle, 2012. "On the Inclusion of the Chinese Renminbi in the SDR Basket," CESifo Working Paper Series 3989, CESifo Group Munich.
- Agnès Bénassy-Quéré & Damien Capelle, 2012. "On the inclusion of the Chinese renminbi in the SDR basket," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00763966, HAL.
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-22 (All new papers)
- NEP-IFN-2012-12-22 (International Finance)
- NEP-MON-2012-12-22 (Monetary Economics)
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