The Impact Of RMB Internationalization On Balance Of Payments

The internationalization of the RMB has achieved certain development.However,given the currency internationalization is a process of coexistence of costs and benefits,RMB internationalization will have a significant impact on internal and external balance,economic and financial security.The Balance of Payments(BOP),which represents China's external balance,has maintained a unique structural feature of "double surplus" between current account(CA)and non-reserve capital and financial account(FA)over the past decade.Therefore,this paper analyzes the impact of RMB internationalization on China's BOP,and studies whether RMB internationalization,exchange rate and interest rate fluctuations are conducive to promoting China's BOP,and also investigate what kind of balance of payments structure should be chosen at different stages of RMB internationalization.Firstly,this paper theoretically explores the influence mechanism of RMB internationalization process on each sub-item in BOP.Then,on the basis of theoretical analysis and current situation analysis,this paper chooses the data of RMB internationalization,BOP,exchange rate and interest rate from January 2010 to December 2017 to establish SVAR model,and further empirically analyses the impact of RMB internationalization process on BOP.This paper finds that the RMB internationalization plays a positive role in China's BOP,which can reduce the occurrence of the huge "double surplus" phenomenon that China has maintained in the past and promote the balance of China's BOP.The changes of RMB real effective exchange rate and interest rate have a significant impact on China's BOP structure.In the initial stage of RMB internationalization,China's BOP structure should maintain a CA surplus(mainly realized by goods trade surplus)and a FA deficit under the overall surplus.In the advanced stage of RMB internationalization,China's BOP structure should maintain the CA surplus(mainly realized by the surplus of service trade items and investment income items)and the FA deficit under the condition of maintaining the overall balance or deficit.Finally,based on empirical and theoretical analysis,this paper puts forward corresponding policy recommendations for rational adjustment of China's BOP pattern and promotion of RMB internationalization.