The Impacts of Exchange Rate and Its Fluctuation on the Internationalization of the RMB

The IMF announced on November 30, 2015 that the RMB would be adopted into the currency basket of the SDR since October 1, 2016 with a weight of 10.92%. This is a milestone of the internationalization of the RMB. This article reviewed the studies by the scholars on the internationalization of the RMB. After that the SVAR model is built upon the amount of the overseas RMB deposits, the RMB exchange rates and the rates of their fluctuations, the impulse-response analyses are applied, to study the relations among the amount of the overseas RMB deposits, the RMB exchange rates and the rates of their fluctuations. The results show that the exchange rate is not simply positively related to the internationalization of the RMB. Sometimes the relation is negative. Moreover, the amount of overseas savings of RMB has a comparatively big impact on the appreciation of the exchange rate. In the end, some suggestions on the RMB internationalization are raised on results of the above analyses.