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Gaining CurrencyThe Rise of the Renminbi$
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Eswar S. Prasad

Print publication date: 2016

Print ISBN-13: 9780190631055

Published to Oxford Scholarship Online: October 2016

DOI: 10.1093/acprof:oso/9780190631055.001.0001

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The RMB Goes Global

The RMB Goes Global

(p.100) Chapter 5. The RMB Goes Global
Gaining Currency

Eswar S. Prasad

Oxford University Press

This chapter describes the increasing use of the RMB in international trade and finance transactions. These developments have been driven by China’s increasing weight in global GDP and trade, and have also been actively promoted by the policies of the Chinese government. The RMB has become the fifth largest international payment currency. It accounts for settlement of about a quarter of China’s foreign trade and 2 percent of global foreign exchange market turnover. China has sanctioned fourteen offshore financial centers, in addition to Hong Kong and Macau, to promote the international use of the RMB. China has also signed bilateral deals with some of its key trading partners such as Japan and Korea to allow cross-border transactions to be settled using their own currencies rather than being intermediated through the U.S. dollar.

Keywords:   RMB internationalization, dim sum bonds, panda bonds, RMB trade settlement, offshore clearing centers, China Cross-Border International Payment System (CIPS), UnionPay, vehicle currency

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