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Digital
Library of the European Council for Modelling and Simulation |
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Title: |
Rising Regional Importance of the Renminbi in the Asia-Pacific Area: A Panel Analysis |
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Authors: |
Eszter Boros, Gabor Sztano |
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Published in:
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(2022). ECMS 2022,
36th Proceedings DOI: http://doi.org/10.7148/2022 ISSN:
2522-2422 (ONLINE) ISSN:
2522-2414 (PRINT) ISSN:
2522-2430 (CD-ROM) ISBN: 978-3-937436-77-7 Communications of the ECMS , Volume 36, Issue 1, June 2022, Ålesund, Norway May 30th - June 3rd, 2022 |
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Citation
format: |
Eszter Boros, Gabor Sztano (2022). Rising Regional Importance of the Renminbi in the Asia-Pacific Area: A Panel Analysis, ECMS 2022 Proceedings Edited By: Ibrahim A. Hameed, Agus Hasan, Saleh Abdel-Afou Alaliyat, European Council for Modeling and Simulation. doi:10.7148/2022-0064 |
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DOI: |
https://doi.org/10.7148/2022-0064 |
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Abstract: |
In the past decade, China has taken several steps to make the renminbi (RMB) a globally important currency. Since the RMB was included in the IMF’s SDR basket in 2016, several central banks have started using it as a reserve currency. Moreover, the exchange rate regime of the RMB has gradually been modified to add some flexibility, and Beijing has begun to promote cross-border RMB trade settlement. In this paper, we use panel data to analyze how changes in the RMB exchange rate might influence the movement of other currencies in the Asia-Pacific region. We find that the RMB’s relative importance has significantly increased from 2015 onwards, i.e. since the date of the last reform of the RMB central parity quoting mechanism. Our results also suggest that the RMB’s impact has remained broadly unchanged since the outbreak of the coronavirus pandemic. Contrary to some other findings, the COVID‑19 has not reduced the relevance of the Chinese currency in the region. |
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