RMB internationalisation and currency co-operation in East Asia

Ulrich Volz

No 125, Working Papers from University of Leipzig, Faculty of Economics and Management Science

Abstract: This paper scrutinises the state of RMB internationalisation and its likely progress over the coming years and discusses its implications for currency co-operation in East Asia. As part of its internationalisation, the RMB is gradually delinked from the dollar, which will effectively put an end to the East Asian dollar standard that has shaped the region's financial architecture over the last three decades and that has provided a relatively high degree of intra-regional exchange rate stability. Because of the close trade and investment ties that have developed across the region, the East Asian countries, especially the ASEAN countries which are striving to create an ASEAN Economic Community, will continue to manage their exchange rates and stabilise their currencies against one another to facilitate cross-border investment and commerce. But instead of a replacing of the dollar standard with an RMB standard we are likely to see some rather loose and informal exchange rate co-operation in East Asia based on currency baskets, with China herself moving towards a managed exchange rate system guided by a currency basket.

Keywords: RMB internationalisation; key currencies; Chinese economy; East Asian monetary co-operation; currency baskets (search for similar items in EconPapers)
JEL-codes: E58 F33 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-mac, nep-mon and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Chapter: RMB Internationalisation and Currency Cooperation in East Asia (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:leiwps:125

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