Factors of Internationalization of Developing Countries' Currencies in the Post-COVID-19 Economy

DOI: 10.20542/0131-2227-2021-65-9-88-97
E. Zvonova (zvonovaelena7@mail.ru), 
Financial University under the Government of the Russian Federation, 49, Leningradskii Prosp., Moscow, 125993, Russian Federation;
А. Kuznetsov (kuznetsov0572@mail.ru), 
Financial University under the Government of the Russian Federation, 49, Leningradskii Prosp., Moscow, 125993, Russian Federation

Received 15.03.2021.

Acknowledgements. The article was prepared based on the results of studies carried out at the expense of budgetary funds on the state assignment of the Financial University for fundamental research work “Competition of currencies in the international monetary system”. 


Over the past three decades, economic transformations and dynamic growth in a number of developing countries have led to a significant increase of their role in the global economy. However, despite the shift in the centre of global economic activity from West to East, the US dollar continues to dominate the international monetary system. The COVID 19 pandemic has disrupted sustainable trade and financial flows, limiting the access of governments and companies in developing countries to international liquidity. The global recession has increased the importance of regional and local factors in the recovery of global economic growth. The current trends in the regionalization of international economic relations, along with the need to finance external debt, create objective prerequisites for a more active use of the currencies of developing countries in the international monetary system. To identify this potential, the authors conducted a comparative analysis of the current positions of developed and developing countries in the world economy and world finance. Internationalization of developing countries› currencies in the international monetary system depends on creation of a number of favourable macroeconomic, institutional and structural conditions. Macroeconomic conditions are: control over the dynamics of nominal per capita income to ensure competitive advantages for exporters; an increase in the share of sovereign debt obligations as a potential reserve asset in the total volume of external debt; improving the performance of the international investment position by increasing the share of high-yield assets of developing countries. Institutional conditions include the internationalization of high-tech companies and the creation of nationally oriented mechanisms and standards for regulating financial markets. The development of existing and creation of new payment and settlement systems based on digital currencies and distributed ledger technology are the main structural conditions for increasing the international competitiveness of the developing countries’ currencies. The authors conclude that only a comprehensive implementation of these conditions will provide a more decentralized nature of the international monetary system in the long term. 


emerging markets, BRICS, international monetary system, external debt, international investment position, MNE, international financial center, foreign exchange market, foreign exchange reserves, digital currencies


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For citation:
Zvonova E., Kuznetsov A. Factors of Internationalization of Developing Countries' Currencies in the Post-COVID-19 Economy. Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2021, vol. 65, No 9, pp. 88-97. https://doi.org/10.20542/0131-2227-2021-65-9-88-97

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