Research On The Influcing Factors And Transmission Mechanism Of Currency Internationalization

The current international economic situation is that,in 2007,the U.S.subprime mortgage crisis triggered the global financial crisis,the European sovereign debt crisis,leading to drastic changes in the international economic and financial situation.The internal conditions of the RMB internationalization is that,with the rapid development of China’s economy and the promotion of international influence,the RMB has certain conditions of international currency.Under this background,there are some theoretical and practical significances to study the influencing factors and transmission mechanism of currency internationalization.First,this paper starts from the three main functions of the international currency,selects the "share of official foreign exchange reserves" and "share of international bonds and notes" and "share of cross-border foreign exchange position" as representative indicators of store of value function,unit of account function and means of payment function,and measure the degree of internationalization of major international currencies such as the dollar,the yen,the pound.Then,this paper summarizes the seven factors of Currency Internationalization: economic strength,trade strength,currency stability,financial market development,military and political,scientific and technological strength and network externalities,and according to the availability of the data and the representative of the index,this paper selects 13 quantitative indicators.Based on that,this paper uses econometric methods,analyses the direct and indirect transmission mechanism of the impact of the influcing factors on the currency internationalization,as well as the transmission mechanism between the three functions of currency internationalization.The results show that there are some differences between the conduction mechanism of the dollar,yen,and pound internationalization.Dollar internationalization mainly shows the conduction mechanism of the comprehensive national strength of all-round development;the development of economic and trade,finance is the foundation of yen internationalization,and military,political and technological is the support;compared with the internationalization of the dollar and the yen,the transmission mechanism of the pound internationalization is relatively smooth,only currency stability,financial market development and scientific and technological strength has a certain effect on pound internationalization.Based on the currency internationalization experience of US dollar,Japanese yen and pound sterling,and combined with China’s specific national conditions,we can put forward the following suggestions:first,to maintain sustained and healthy economic development;second,improve the RMB exchange rate formation mechanism;third,establish and improve the financial system;fourth,enhance military and political strength in science and technology.