Trends and implications in the internationalization of China’s currency: 2017

Review questions: Going global: Trends and implications in the internationalization of China’s currency: 2017 • According to the article, there are 3 periods of increased exchange rate volatility for China starting in 2015. Discuss what happened during these three periods and how volatility in general presents challenges for China and her trading partners. • Throughout the article, it is suggested that RMB depreciation has affected internationalization of the RMB. How so? • What is China’s ambition for internationalization of the RMB, and in what ways has the ambition fallen short in terms of the RMB becoming an international reserve currency. • There appear to be two ways in which RMB internationalization can occur. First, through trade settlement. Second through the financial account. Discuss the current use of both the current account and financial account in terms of RMB internationalization and how this could be expanded in the future.