Acta Oeconomica Pragensia 2014, 22(3):3-16 | DOI: 10.18267/j.aop.440

Is the Chinese Currency on the Way to the World Currency Status?

Martina Jiránková
Vysoká škola ekonomická v Praze, Fakulta mezinárodních vztahů (martina.jirankova@vse.cz).

The article deals with the aspiration of the Chinese currency to become the world currency status. The world currency must perform as a store of value, means of exchange, and an accounting unit internationally for governments as well as the private sector. The important conditions of this position are an important share in the world's GDP and the global trade, stability of the domestic economy, and financial markets of high quality and depth. The last one is the most problematic of the given assumptions. Because of it, China has started a reform of its financial sector, and this reform has been accelerated since 2012. The convertibility of the Chinese currency is planned in several stages: gradually from its use in international trade, to international investments, and finally in international reserves. So far, payments for trade transactions have been fully liberalised. As for financial transactions, obstacles are gradually reduced. The internationalisation of the Chinese currency is taking place in the wider context of the world economy, which the text also discusses.

Keywords: Renminbi internationalisation, world currency, Mundell-Fleming trilemma, Triffin's dilemma, capital movement liberalisation
JEL classification: F20, F31

Published: June 1, 2014  Show citation

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Jiránková, M. (2014). Is the Chinese Currency on the Way to the World Currency Status? Acta Oeconomica Pragensia, 22(3), 3-16. doi: 10.18267/j.aop.440
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