Research On Influencing Factors Of RMB Internationalization

The internationalization of RMB is an important strategy in China.In recent years,RMB has been developing continuously in trade valuation,foreign exchange trading,international bonds and foreign exchange reserves.In 2016,RMB joined the SDR currency basket,which indicates that the process of RMB internationalization has made some progress.At the same time,as an emerging market country,China can better develop its own economy only by constantly strengthening economic exchanges with other countries and getting rid of the economic influence of other countries.Therefore,it is imperative to promote the RMB internationalization.In the process of promoting RMB internationalization,it is the key to clarify the influencing factors of RMB internationalization.This paper first explores the influencing factors of currency internationalization,and divides the process of currency internationalization into three stages:pre-stage,mid-stage and post-stage.Then,we use cluster analysis to group currencies and select the representative currencies of each stage of currency internationalization.Then,the dynamic panel data representing the composition of currencies in different stages are estimated by using the comprehensive FGLS method,and the conclusion is drawn that the influencing factors of different stages of currency internationalization have staged characteristics.Among them,economic strength and network externalities promote monetary internationalization in all stages,and the influence of network externalities on monetary internationalization shows the characteristics of increasing step by step;the level of financial market development has a positive impact in the early and late stages,but a negative impact in the medium term;the level of foreign trade has no significant impact in the early stage of monetary internationalization,while in the process of monetary internationalization,the level of foreign trade has a negative impact Later,exchange rate fluctuation will inhibit the process of currency internationalization in the early stage,while in the middle and later stages,it will promote the process;in the whole process of currency internationalization,inflation has no significant impact.Then,according to the above conclusions,combined with the internationalization stage of RMB,the influencing factors are further analyzed and tested.By building a variable autoregressive model and estimating the factors affecting RMB internationalization with VAR,we draw the following conclusions:a country's economic strength,the level of financial market development,exchange rate fluctuation,foreign trade level and network externalities can promote RMB internationalization,while inflation does not affect the process of RMB internationalization.The level of financial market development promotes the internationalization of RMB,which is inconsistent with the research conclusions in the stage of currency internationalization.At the end of the paper,some policy suggestions are put forward to promote the process of RMB internationalization.