The SDR and influences on the currency swap agreements for RMB

Soojoong Nam, Weining Bi and David Kim

Applied Economics Letters, 2022, vol. 29, issue 16, 1489-1492

Abstract: We analyse the determinants of RMB as an international reserve currency and the impact of joining the Special Drawing Rights (SDR) on the currency swap agreements between China and other countries. A panel logit model is estimated using annual data for China and 33 countries for the period from 2009 to 2018. The results show that the relative economic size, trade dependence, interest rate differential, and geopolitical relation are important for determining the likelihood of signing the RMB bilateral swap agreements between China and the partner countries. Our analysis also reveals that RMB’s inclusion in the SDR was an important factor raising the probability of concluding an RMB bilateral swap agreement.

Date: 2022
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DOI: 10.1080/13504851.2021.1940077

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