Will the RMB internationalize?

For the first time, a March 2023, the RMB supplants the dollar in trading volume on the Moscow Stock Exchange. Before the invasion of Ukraine, the Chinese currency occupied a negligible place in Russian exchanges. Western sanctions against the Russian financial system have forced the Kremlin and Russian companies to shift their foreign trade payments from the dollar and euro to other currencies, including yuan.

So, will the war in Ukraine precipitate the internationalization of the RMB?

Since Xi Jinping came to power, the internationalization of the RMB is a programmatic component of the Chinese government, which follows a reality of the international market : in 2019, close to 285 billions of dollars in trade took place there daily in RMB. Is around 4,3% of all trade. For the IMF, the RMB is already an international currency : she added it to its composition basket of its unit of account, and DTS, alongside the US dollar, euro, yen and pound sterling. While Russia is increasingly demanding Chinese currency, it is also the BRICS countries that insist on using Chinese currency in their transactions. Thereby, ICBC Brazil has just signed its first cross-border transaction sans dollar, with RMB. The country's RMB reserves have exceeded its euro reserves. Saudi Arabia, on his side, has already “converted” to the RMB without its international exchanges, notably for oil.

Nowadays, 10 countries have foreign exchange reserves of RMB and 40 accept RMB in their international trade.

This process must beconstant and cautious », according to report 2022 on the internationalization of the RMB of the Central Bank of China. The advantages would be certain: facilitate foreign investment, become a benchmark, obtain international credit.