Patterns of invoicing currency in global trade: New evidence

Abstract

This paper presents the most comprehensive and up-to-date panel data set of invoicing currency patterns in global trade. It provides data on the shares of exports and imports invoiced in US dollars, euros, and other currencies for 115 countries since 1990. The evidence from these data confirms findings from earlier research regarding the strong persistence in invoicing currency patterns and the globally dominant role of the US dollar. It also points to several novel facts, such as the increase in the use of the dollar and the euro for invoicing, and the use of the euro as a vehicle currency in parts of Africa. Exchange rate pass-through and trade elasticity estimations with these data confirm that countries invoicing more in dollars (euros) tend to experience greater dollar (euro) exchange rate pass-through to their import prices and higher sensitivity of their trade volumes to fluctuations in these exchange rates.