Chinese Yuan as a World Currency: Imperatives and Realities

Kudryashova I. Chinese Yuan as a World Currency: Imperatives and Realities. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2017, no 9, vol. 61, pp. 36-44

DOI: 10.20542/0131-2227-2017-61-9-36-44

I. Kudryashova (,
Volgograd State University, 100, Universitetskii Prosp., 400062 Volgograd, Russian Federation 


In recent decade, the PRC has implemented a number of measures aimed at expanding the area and scope of international use of its national currency. This already ensured the inclusion of the Yuan on a par with the US dollar, Euro, Pound sterling and Japanese yen into the SDR basket. Widely used worldwide as a measure of value, means of payment and store of value, national/single currency of the United States, Euro zone, UK and Japan currently are the world’s leading currencies. The acquisition of international status is based on certain conditions that characterize the country’s reliability in the global financial system and the possibility of performing various operations in its national currency. Depending on their nature, these conditions can be divided into two groups: economic as well as institutional and organizational. On the basis of comparative analysis of conditions for improving the international status of the Yuan, and the conditions for achieving and maintaining status as a world currency of the U.S. dollar, Euro, pound sterling and Japanese yen, it is shown that China has not yet formed all necessary determinants of non-residents’ demand in national currency. Confirmation of this conclusion is shown at a lower compared to world currencies, the internationalization of the Yuan, the valuation of which is carried out on the basis of quantitative indicators used by IMF to determine whether a currency is classified as “freely usable”. Renminbi’s achievement of a world currency status is possible only in case of ensuring its full convertibility, deepening stock and debt sectors of the PRC’s financial market and can be carried out only after a time sufficient for the manifestation of external network effects, i.e. to reorient the choice of non-residents in favor of Chinese monetary unit as a measure of value, as a mean of payments and as a reserve fund. 


world currency, currency internationalization, Chinese Yuan, convertibility, financial market, international reserves, exchange rates 


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For citation:

Kudryashova I. Chinese Yuan as a World Currency: Imperatives and Realities. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2017, no 9, vol. 61, pp. 36-44. DOI: 10.20542/0131-2227-2017-61-9-36-44