Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101217
Authors: 
Zhang, Liqing
Tao, Kunyu
Year of Publication: 
2014
Series/Report no.: 
ADBI Working Paper Series 481
Abstract: 
Despite the increasing recognition that the renminbi (RMB) may eventually become a key global currency, several important questions remain to be answered. This paper analyzes the benefits and costs of the RMB becoming an international currency. The benefits include reduced exchange risk, promotion of the development of the financial market, and expansion of firms in the People's Republic of China. The costs include general costs, which complicate monetary policy and exchange rate policy, and several transitional risks. We argue that the benefits of RMB internationalization should surpass its costs, particularly in the long run, and provide comprehensive policy choices for a sustainable process of RMB internationalization.
Subjects: 
renminbi internationalization
financial development
transitional risks
international monetary system
JEL: 
F42
F31
F36
Document Type: 
Working Paper

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