Chinese Banks' Dollar Lending Decline

Laurie Pounder DeMarco and Joshua Walker
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Laurie Pounder DeMarco: https://www.federalreserve.gov/econres/laurie-pounder-demarco.htm

No 2025-05-16, FEDS Notes from Board of Governors of the Federal Reserve System (U.S.)

Abstract: The dominant international role of the U.S. dollar has received renewed attention in recent years, but across many measures, the dollar's dominance in international finance has changed little.2However, there has been a notable change in one statistic. Dollar-denominated cross-border bank lending to emerging market economies (EMEs) declined almost 10 percent between the start of 2022 and early 2024.3According to our analysis using both public and restricted BIS banking statistics, this is largely because of a shift in the currency composition of lending abroad by Chinese banks. With both economic and geopolitical considerations supportive of the trend, Chinese banks have notably reduced their dollar lending to other emerging market economies (EMEs), increasing lending in renminbi (RMB).

Date: 2025-05-16
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfn:2025-05-16

DOI: 10.17016/2380-7172.3761

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