Who cares about the Chinese Yuan?
Vimal Balasubramaniam (),
Ila Patnaik () and
Ajay Shah ()
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Ila Patnaik: National Institute of Public Finance and Policy
Working Papers from National Institute of Public Finance and Policy
The rise of China in the world economy and in international trade has raised the possibility of a rise of the Yuan as an international currency, particularly after the Chinese authorities have undertaken policy initiatives such as Yuan settlement and Yuan swap lines. In this paper, we measure one dimension of Yuan internationalisation: the role of the Yuan in the exchange rate arrangements of other economies. While the magnitudes are small, our findings show that as many as 34 currencies in the world have been sensitive to movements in the Yuan. This suggests that the Yuan potentially has a significant role to play in global exchange rate arrangements. Contrary to popular belief, however, we find a limited role of the Yuan among Asian. economies.
Keywords: Renminbi; Yuan; Exchange rate regime; Internationalisation; East Asia (search for similar items in EconPapers)
JEL-codes: F31 F33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ifn, nep-mon and nep-tra
Note: Working Paper 89, 2011
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Persistent link: https://EconPapers.repec.org/RePEc:npf:wpaper:11/89
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