Doo Yong Yang: This paper analyzes the issue of Chinese renminbi (RMB) internationalization. The authors investigate whether the RMB will become a global or regional currency based on China's economic conditions and institutional development. This issue is related to the process of internationalization of the RMB, which includes market-driven factors.
This issue of Chinese RMB started with the internationalization of the RMB in the late 2000s. In 2009, China established the dim sum bond market and expanded cross-border RMB settlement, which helped establish pools of offshore RMB liquidity. Since then, RMB internationalization has accelerated. In 2013, the Chinese RMB was the eighth most traded currency in the world and the seventh most traded in early 2014. By the end of 2014, the RMB ranked fifth as the most traded currency. In terms of interest rate derivative, its amount is now ranked as tenth. Government efforts on pilot schemes and related...