Geographic spread of currency trading: the renminbi and other EM currencies

Yin-Wong Cheun and Robert McCauley

No 806, BIS Working Papers from Bank for International Settlements

Abstract: This paper studies the ongoing diffusion of renminbi trading across the globe, the first such research of an international currency. It analyses the distribution in offshore renminbi trading in 2013 and 2016, using comprehensive data from the Triennial Central Bank Survey of Foreign Exchange and Over-the-Counter Derivatives Market Activity. In 2013, Asian centres favoured by the policy of renminbi internationalisation had big shares in global renminbi trading. In the following three years, renminbi trading seemed to converge to the spatial pattern of all currencies, with a half-life of seven to eight years. The previously most traded emerging market currency, the Mexican peso, shows a similar pattern, although it is converging to the global norm more slowly. Three other major emerging market currencies show a qualitatively similar evolution in the geography of their offshore trading. Overall the renminbi's internationalisation is tracing an arc from the influence of administrative measures to the working of market forces.

Keywords: international currency; FX turnover; renminbi internationalisation; international financial centre (search for similar items in EconPapers)
JEL-codes: C24 F31 F33 G15 G18 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2019-08
New Economics Papers: this item is included in nep-mon, nep-sea and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Geographic spread of currency trading: The renminbi and other EM currencies (2019)
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