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Patterns in Invoicing Currency in Global Trade

Author

Listed:
  • Ms. Emine Boz
  • Camila Casas
  • Georgios Georgiadis
  • Ms. Gita Gopinath
  • Helena Le Mezo
  • Arnaud Mehl
  • Miss Tra Nguyen

Abstract

This paper presents the most comprehensive and up-to-date panel data set of invoicing currencies in global trade. It provides data on the shares of exports and imports invoiced in US dollars, euros, and other currencies for more than 100 countries since 1990. The evidence from these data confirms findings from earlier research regarding the globally dominant role of the US dollar in invoicing – despite the comparatively smaller role of the US in global trade – and the overall stability of invoicing currency patterns. The evidence also points to several novel facts. First, both the US dollar and the euro have been increasingly used for invoicing even as the share of global trade accounted for by the US and the euro area has declined. Second, the euro is used as a vehicle currency in parts of Africa, and some European countries have seen significant shifts toward euro invoicing. Third, as suggested by the dominant currency paradigm, countries invoicing more in US dollars (euros) tend to experience greater US dollar (euro) exchange rate pass-through to their import prices; also, their trade volumes are more sensitive to fluctuations in these exchange rates.

Suggested Citation

  • Ms. Emine Boz & Camila Casas & Georgios Georgiadis & Ms. Gita Gopinath & Helena Le Mezo & Arnaud Mehl & Miss Tra Nguyen, 2020. "Patterns in Invoicing Currency in Global Trade," IMF Working Papers 2020/126, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2020/126
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    WP; invoicing share; invoicing currency share; invoicing currency of trade; dominant currency paradigm; exchange rate pass-through; data set; invoicing currency pattern; currency data; Currencies; Exports; Exchange rates; Data collection; Global;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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