Kari Heimonen and Risto Rönkkö from the University of Jyväskylä and the Bank of Finland have taken a fresh look at the ever-topical notion that the Rmb is increasingly being woven more into the global currency system
Since China got off its narrow U.S. dollar peg in 2005 there’s been a strong case to be made for its increasing adoption. Especially given how much bigger since that time the Chinese economy has become.
However, the title of the paper rather gives away the results of the analysis and there isn’t a lot more to add. The U.S. dollar, Euro and Japanese Yen are where the world wants to do business and the Rmb trails all.
Moreover, in times of stress relative movements have been observed among the big three but the Rmb isn’t used as a counterweight to this established grouping even at those times.
So, yes, the Rmb is more of a noise than it was 20-years ago; but by a surprisingly small increment. There’s a little more in the paper which you can read in full via the following link The Renminbi’s Global Role as an Anchor Currency: No Evidence.
Happy Sunday.