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The Sound of Economics
China’s third attempt to internationalise its currency
Jan 17, 2024
The podcast discusses China's latest attempt to internationalize its currency, the RMB. They explore China's previous attempts, its current approach, and the potential implications. The experts also discuss the impact on the euro compared to the dollar and the potential fragmentation of the global financial system. Strategies to strengthen the euro and the rise of the RMB are also explored.
28:08
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Quick takeaways
- China's second attempt to internationalize the RMB through digitalization faced challenges in gaining widespread adoption, particularly in cross-border use.
- The third attempt to internationalize the RMB is characterized by institutional mechanisms such as inclusion in the IMF's special drawing rights basket and bilateral swap lines, which have facilitated a rise in RMB demand among countries participating in the Belt and Road Initiative and facing sanctions.
Deep dives
Overview of China's push to internationalize the RMB
In this podcast episode, Alicia Gasia Herrera and Alicia Migni discuss their paper on China's efforts to internationalize the RMB. They highlight the increase in the use of RMB in international transactions since 2022, especially due to the Ucarin War and sanctions on US dollar transactions. They compare this recent push to previous attempts and examine the institutional and demand factors driving RMB usage outside of China. The title "Third Time Lucky" refers to the potential success of this latest attempt to internationalize the RMB.
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Discover
highlights
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