Commodity Price, Exchange Rate Volatility And Cross - Border Trade Valuation Of Currency Selection

The internationalization of the RMB is one of the core content of China’s financial strategy and one of China’s core national interests. The RMB settlement of cross-border trade is an important part of the internationalization of the RMB, as the vanguard of promoting the internationalization of the RMB, cross-border trade settlement in fact already started from2009, and has made great progress. So, it’s the need of China’s macroeconomic and financial policies to promote cross-border RMB trade settlement. From the micro level, the enterprise is directly involved in cross-border trade and decision-making. Since2007, because of the international financial crisis and the European debt crisis, the dollar and euro exchange rates fluctuate significantly, they desperately want to use the RMB for trade settlement.Therefore, the object of this paper is denominated in the currency of export enterprises choice behavior.From the angle of export enterprises to maximize the expected profit, denominated in the currency of export enterprises choice theory model, in this model, the innovation introduced denominated monetary select a factor which affects the import trade. Theoretical model based on the results of the current actual situation, we collected export and import trade denominated in the period1980-2012the selected data, and the establishment of a VECM model for empirical analysis. Based on the theoretical and empirical analysis, we find that:Japan in yen-denominated imports higher the ratio, the higher the proportion of Japanese yen-denominated export trade; When the U.S. dollar against the long term, the higher the volatility of the yen, Japan the export manufacturers prefer denominated in yen; Japan’s export trade denominated in the currency choice inertia.Based on the above findings, China should seize the important opportunities during the international financial crisis and the debt crisis in Europe, continue to promote cross-border RMB trade settlement, to the formation of benign inertia effect. In addition, China should make full use of its comprehensive strength to promote RMB influence in global commodity pricing.