EconPapers    
Economics at your fingertips  
 

The Internationalisation of the Renminbi as an Investing and a Funding Currency: Analytics and Prospects

Dong He, Paul Luk () and Wenlang Zhang
Additional contact information
Wenlang Zhang: Hong Kong Monetary Authority

No 12015, Working Papers from Hong Kong Institute for Monetary Research

Abstract: The use of international currencies in the global financial system is not symmetric: while a few currencies have been primarily used as investing currencies, a few others have mostly served as funding currencies; only a handful have a better balance functioning as both investing and funding currencies. This paper develops a three-currency model to study the determinants of the demand for assets and liabilities denominated in an international currency, and attempts to shed light on the prospects for the renminbi as a budding international currency. We show that interest rate differentials would be only one of the factors shaping the renminbi's position, while other factors, including the correlation between foreign countries' economic growth and their bilateral exchange rates against the renminbi, and the correlation between exchange rates of the renminbi with other international currencies, would also be important. A broad interpretation of these findings is that the renminbi will likely be very attractive to investors from high-income economies and fund-raisers from emerging market economies.

Pages: 36 pages
Date: 2015-01
New Economics Papers: this item is included in nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.hkimr.org/uploads/publication/407/wp-no-01_2015-final-.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Internal Server Error (http://www.hkimr.org/uploads/publication/407/wp-no-01_2015-final-.pdf [301 Moved Permanently]--> http://www.aof.org.hk/research/HKIMR/uploads/publication/407/wp-no-01_2015-final-.pdf [301 Moved Permanently]--> https://www.aof.org.hk/research/HKIMR/uploads/publication/407/wp-no-01_2015-final-.pdf)

Related works:
Journal Article: Internationalisation of the Renminbi as an Investing and a Funding Currency: Analytics and Prospects (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hkm:wpaper:012015

Access Statistics for this paper

More papers in Working Papers from Hong Kong Institute for Monetary Research Contact information at EDIRC.
Bibliographic data for series maintained by HKIMR ().

 
Page updated 2021-04-12
Handle: RePEc:hkm:wpaper:012015