The Internationalization Of The Renminbi: Determinants, Costs, Benefits, Obstacles. An Overview

China has faced spectacular economic growth in the last three decades in terms of GDP and international trade. The policy initiatives of the government to internationalize the currency and the increasing importance of Chinese economy at global level have pushed the Renminbi (RMB) on the international stage and have raised its prospect as an international currency. Moreover, the importance of RMB has become one of the most debated issues in the global financial system in the last decades, even if RMB convertibility has not made possible until recently the discussion, being considered a prerequisite for capital account liberalization. The growing interest in the internationalization of RMB has been appreciating recently, partly due to slow progress of regional financial cooperation and international financial reforms. The international status of currencies is the main feature of international monetary system, shaping the world economic and political system, thus influencing and conduct the international relations. In these circumstances, the attractiveness of Renminbi has been increasing constantly, mainly due to its economic and political involvement, both to China and to international monetary system. The growing interest in the internationalization of RMB has been appreciating recently, partly due to slow progress of regional financial cooperation and international financial reforms. Some argue that RMB is already on the brink to become an international currency, others argue that international market don’t accept it very easy due to China’s underdeveloped financial system, rigid monetary policy instruments and mechanisms, weak control over capital account and inefficient legal system This paper aims to review the relevant literature in the field to emphasize the importance of the internationalization process of Renminbi in the context of increased elements of costs, benefits and obstacles, but also economic and political determinants of this phenomenon, along with advised opinions about the future of the international monetary system.