How Has the Renminbi’s Role in Non-USD Currency Markets Evolved After COVID-19? An Analysis Based on Spillover Effects

Changrong Lu, Fandi Yu, Jiaxiang Li (), Guanghong Zheng and Lian Liu
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Changrong Lu: School of Economics, Nagoya University of Commerce and Business, Aichi 470-0193, Japan
Fandi Yu: Graduate School of Asia-Pacific Studies, Waseda University, Tokyo 169-8555, Japan
Jiaxiang Li: Department of Economics, State University of New York at Binghamton, Binghamton, NY 13902-6000, USA
Guanghong Zheng: Faculty of International Media, Communication University of China, Beijing 100024, China
Lian Liu: School of Management, Nagoya University of Commerce and Business, Aichi 470-0193, Japan

IJFS, 2025, vol. 13, issue 1, 1-27

Abstract: Global uncertainty and the COVID-19 pandemic have significantly impacted the integration of emerging economies into global financial markets. Post-pandemic, the Federal Reserve’s interest rate hikes have drawn investor attention to relatively independent and stable currencies. This study investigates the sustained independence of the Renminbi by analyzing the spillover effects between the Renminbi and other major currencies in the context of the pandemic and USD interest rate hikes. By employing high-frequency data and cross-validating the results with low-frequency data transformed through Synchro Squeezing Wavelet Transform, we aimed to enhance the robustness of our findings. This analysis provides valuable insights for investors, highlighting the stability advantages of the Renminbi in the context of de-dollarization and global currency diversification.

Keywords: the COVID-19 pandemic; the Fed rate hike; spillover effects; the Renminbi independence (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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