Research On The Influence Of Rmb In East Asia During The Process Of Internationalization

The internationalization of a currency is generally considered as a process of a currency be accepted as an account, settlement and reserve currency all around the world. Because of the geographical advantage and close economic and trade contacts, the regional development of the RMB in the East Asia has become a key step in its process of internationalization. Research on linkage character, influence factor and monetary anchor position of their exchange rate is conducive to formulate a more clear understanding of the Renminbi's role in East Asia and to provide some reasonable policy recommendations.Basing on the perspective of exchange rate, this paper analyze the theoretical and practical basis for the arrangement of exchange rate system in East Asia, and then, in order to study the linkage between the RMB and East Asian currency, it preliminary study its spatial characteristics by using the Chi-plot method, establishing a series of MVGARCH model to observe its characteristics of volatility and the influence factors which would play an important role. After that, this paper examines whether the RMB has supplanted the USD dollar as the major anchor currency in implicit currency baskets of East Asia counties by using Frankel-Wei regression model.The main findings are as follows:(1) The exchange rate of RMB and the East Asian countries showed a significant positive quadrant correlation, which tends to appreciation or depreciation in the same direction and shows collaborative features.(2) The volatility spillover between RMB and East Asian countries' currency has increased significantly after the system reform of RMB, RMB occupies the leading position in the information transmission of bilateral exchange rate. The high correlation between Ringgit, Thai baht and the RMB to a large extent due to a higher proportion of US dollar in their currency baskets. A significant closer relationship with RMB was showed in Korea and Singapore after the second system reform of RMB.(3) The impact of the current RMB on East Asian currency is mainly a trade phenomenon, the factors that international capital liquidity and VIX Index has a negative effect on the relationship between the RMB and the East Asian currency.(4) Countries in East Asian tend to anchor the currency basket composed by multi-currency instead of dollar, but US dollar still shows significant weight in their baskets, RMB is difficult to replace the US dollar as anchor currency in East Asia in the short term.