Issues for Renminbi Internationalization: An Overview
This paper provides an overview of the potential international role of the renminbi (RMB). Reviewing the current state, the paper finds that much progress has been made on RMB settlements for trade involving the People’s Republic of China (PRC) and on RMB-denominated bond issuance in Hong Kong, China, but that RMB internationalization is still limited due to capital account controls. It argues that a high degree of RMB internationalization requires significant capital account liberalization, which in turn would call for greater exchange rate flexibility so that the central bank can enjoy monetary policy autonomy. This, however, would pose a challenge for PRC authorities as hasty capital account liberalization could expose its financial markets to the risk of crisis. The paper also emphasizes the importance of institutional reforms to make the RMB a truly international reserve currency.
|Date of creation:||21 Jan 2014|
|Date of revision:|
|Contact details of provider:|| Postal: Kasumigaseki Building 8F, 3-2-5, Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan|
Fax: (81-3) 3593-5571
Web page: http://www.adbi.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eswar S. Prasad & Raghuram G. Rajan, 2008.
"A Pragmatic Approach to Capital Account Liberalization,"
Journal of Economic Perspectives,
American Economic Association, vol. 22(3), pages 149-72, Summer.
- Prasad, Eswar & Rajan, Raghuram G., 2008. "A Pragmatic Approach to Capital Account Liberalization," IZA Discussion Papers 3475, Institute for the Study of Labor (IZA).
- Eswar S. Prasad & Raghuram Rajan, 2008. "A Pragmatic Approach to Capital Account Liberalization," NBER Working Papers 14051, National Bureau of Economic Research, Inc.
- Edwin M. Truman & Anna Wong, 2006. "The Case for an International Reserve Diversification Standard," Working Paper Series WP06-2, Peterson Institute for International Economics.
- Claudio Borio & Piti Disyatat, 2011. "Global imbalances and the financial crisis: Link or no link?," BIS Working Papers 346, Bank for International Settlements.
- Nicholas R. Lardy & Nicholas Borst, 2013. "A Blueprint for Rebalancing the Chinese Economy," Policy Briefs PB13-2, Peterson Institute for International Economics.
- Obstfeld, Maurice & Rogoff, Kenneth, 2009.
"Global Imbalances and the Financial Crisis: Products of Common Causes,"
CEPR Discussion Papers
7606, C.E.P.R. Discussion Papers.
- Obstfeld, Maurice & Rogoff, Kenneth, 2009. "Global imbalances and the financial crisis: products of common causes," Proceedings, Federal Reserve Bank of San Francisco, issue Oct, pages 131-172.
- Michael W. Klein, 2012. "Capital Controls: Gates versus Walls," NBER Working Papers 18526, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:ris:adbiwp:0454. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marc Benger)
If references are entirely missing, you can add them using this form.