Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101193
Authors: 
Cheung, Yin-Wong
Year of Publication: 
2014
Series/Report no.: 
ADBI Working Paper Series 472
Abstract: 
The People's Republic of China (PRC) has been quite aggressive recently in promoting the international use of its currency, the renminbi. Historical experience suggests that an active offshore market is essential for a global currency. Indeed, anecdotal evidence affirms the role of offshore markets in pushing the renminbi currency to the world. One should not, however, overplay the contribution of offshore markets. While offshore markets offer the opportunities to experiment with the global use of the currency, the overseas acceptance of the renminbi is ultimately determined by both internal and external economic forces, and geopolitical factors. With its relatively small size, the offshore renminbi is not likely to pressure the PRC and alter its financial liberalization policy. A well-organized offshore renminbi market will complement the PRC's renminbi internationalization policy, but it is not possible to raise the currency's global status beyond the level justified by its economic and political attributes.
Subjects: 
renminbi
yuan
international monetary policy
currency internationalization
offshore currency market
onshore currency market
foreign exchange
financial centers
JEL: 
F33
Document Type: 
Working Paper

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