The internationalization of the chinese rmb: road to the status of a world currency

Abstract

The economic successes achieved by the PRC in recent years naturally raised the question of the possibility of converting the national monetary unit (yuan) into an international currency, which would play a significant role in servicing the country's foreign trade and investment relations, and in the turnover of global currency and financial markets. An effective solution to this problem can provide China with a number of long-term geopolitical and economic advantages; in particular, it would significantly increase the competitiveness of the financial system and the inflow of foreign capital into it. The basic prerequisites for the internationalization of the yuan have already been established: in terms of GDP and exports of goods and services, the PRC is one of the leading countries in the world, with significant foreign exchange assets accumulated, that ensure the stability of the financial system. For the successful promotion of the national currency abroad, there are still some obstacles, in particular, the free convertibility of the yuan has not been introduced and the capacity of the financial market is insufficient, which reduces the interest of foreign investors in the yuan. The emergence of the Chinese national currency as a full-fledged international currency implies a significant increase in its role in foreign trade operations of the PRC, an increase in the use of yuan financial instruments for placement by non-residents of private savings and official reserves, a further increase in volumes and diversification of conversion operations with the yuan in the domestic and foreign currency markets.