TITLE:
Effects of Futures Varieties Opening Up on Currency Internationalization: Evidence from China
AUTHORS:
Hui Gao, Tianchen Gao
KEYWORDS:
International Commodity Futures, Internationalization of RMB, Granger Cau-sation Test, Cointegration Test, ECM
JOURNAL NAME:
Theoretical Economics Letters,
Vol.12 No.3,
June
22,
2022
ABSTRACT: The internationalization of the futures market has a
certain impact on the internationalization of the RMB, and the opening up of
futures varieties to the outside world is the most important link in the
internationalization of the futures market, and it is necessary to
quantitatively study the quantitative impact of the opening up of futures
varieties on the internationalization of the RMB. Based on the monthly data
from 2018 to 2022, this paper adopts the quantitative research method of
cointegration-related theoretical model for the domestic international
commodity futures (crude oil, iron ore, PTA) variables (futures price,
turnover, position volume) on the variables of RMB internationalization (RMB
international payment global market share, cross-border trade RMB business
settlement amount, foreign exchange reserves, RMB real effective exchange rate
index, RMB financial transactions), and studies the overall impact of
international commodity futures on RMB internationalization. The study shows
that the three indicators of the international commodity futures variable have
different degrees of influence on the RMB internationalization index, of which
the influence of price and open interest is significantly greater than the
turnover. In the long run, the international futures price and open interest
have a positive impact on the internationalization of the RMB, the turnover has
a negative impact, and the impact of crude oil futures prices and open interest
is stronger than that of iron ore and PTA. In the short term, the international
commodity futures indicators have a certain impact on the internationalization
of the RMB, crude oil and iron ore have a greater impact than the PTA, there
are differences in the international development of different commodity
markets, and the fitting effect of the model crude oil is better than other
varieties. It is recommended to promote balanced development of the futures
market internationalization through a variety of measures, continuously improve
the international pricing power and influence of futures varieties, increase
the open interest of futures, moderately reduce the turnover, and effectively
promote the further development of RMB internationalization.