The Impact of Yuan Internationalization on the Euro-Dollar Exchange Rate

Agnès Benassy-Quere and Yeganeh Forouheshfar

Working Papers from HAL

Abstract: We study the implication of a multipolarization of the international monetary system on crosscurrency volatility. More specifically, we analyze whether the internationalization of the yuan could modify the impact of asset supply and trade shocks on the euro-dollar exchange rate, within a threecountry, three-currency portfolio model. Our static model shows that the internationalization of the yuan (defined as a rise in the yuan in international portfolios) would be either neutral or stabilizing for the euro-dollar rate, whatever the exchange-rate regime of China. Moving to a dynamic, stockflow framework, we show that the internationalization of the yuan would make exchange-rate variations more efficient to stabilize net foreign asset positions after a trade shock.

Keywords: China; Yuan; Exchange-rate regime; Euro; Dollar (search for similar items in EconPapers)
Date: 2013-02
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mon and nep-opm
Note: View the original document on HAL open archive server: https://pse.hal.science/hal-00961708v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://pse.hal.science/hal-00961708v1/document (application/pdf)

Related works:
Working Paper: The Impact of Yuan Internationalization on the Euro-Dollar Exchange Rate (2013)
Working Paper: The Impact of Yuan Internationalization on the Euro-Dollar Exchange Rate (2013)
Working Paper: The Impact of Yuan Internationalization on the Euro-Dollar Exchange Rate (2013)
Working Paper: The impact of yuan internationalization on the euro-dollar exchange rate (2013)
Working Paper: The Impact of Yuan Internationalization on the Euro-Dollar Exchange Rate (2013)
Working Paper: The impact of yuan internationalization on the euro-dollar exchange rate (2013)
Working Paper: The impact of yuan internationalization on the euro-dollar exchange rate (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-00961708

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().