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The sluggish internationalization of the renminbit

Author

Listed:
  • Adam Gwiazda

    (Casimir the Great University in Bydgoszcz, Department of Political Theory)

Abstract

During the last twenty years the Chinese yuan (officially known as renminbi – RMB) has travelled the road from unconvertible currency to international currency accepted in the world trade and finance. This was achieved both under the pressure from foreign trading partners as well as through adjusting China’s monetary policy to the changes in major currencies and international capital flows. As China’s economy is so heavily dependent on trade, particularly with its largest trading partners, the United States and the European Union, tensions with the US administration over the undervalued renminbi could be very costly for the Chinese economy and might involve the potential loss of its biggest export market. The dilemma between trade expansion and the renminbi exchange rate regime have not, so far, been resolved. China has to allow the market to play a more decisive role in exchange-rate formation and to further enhance the flexibility of the RMB exchange rate.

Suggested Citation

  • Adam Gwiazda, 2017. "The sluggish internationalization of the renminbit," Bank i Kredyt, Narodowy Bank Polski, vol. 48(5), pages 483-494.
    • Handle: RePEc:nbp:nbpbik:v:48:y:2017:i:5:p:483-494
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    References listed on IDEAS

    as
    1. Prasad, Eswar S., 2016. "Gaining Currency: The Rise of the Renminbi," OUP Catalogue, Oxford University Press, number 9780190631055, Decembrie.
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    More about this item

    Keywords

    yuan-renminbi (RMB); exchange rate; monetary policy;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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