The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

RMB Internationalisation

  • Gao Haihong
Reference work entry


China’s growing economic weight in the world economy is the fundamental driver for RMB internationalisation. The rationale behind this includes the drawbacks of the current international monetary system, the benefits for Chinese enterprises and financial institutions, and the intention of inviting foreign pressure for domestic reform.

The use of the RMB began in cross-border trade and investment, and soon expanded to offshore markets and financial transactions. It has also become a foreign reserve currency held by some central banks. The RMB’s future depends on many conditions, including the pace of China’s capital opening, exchange rate flexibility, domestic financial market development and market acceptance.


Bilateral currency swaps Capital account openness China, currency convertibility Currency internationalisation Domestic financial market Exchange rate flexibility Foreign reserves International monetary system Offshore RMB markets RMB 

JEL Classifications

E52 O53 
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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  1. 1.