Main Article Content


Background and the purpose: The Chinese economy is the fastest growing and changing economy in the modern world. The importance of the renminbi as an international currency is not relevant to China's economic potential and role in the global economy, however, many scientific studies indicate that the position of that currency in the functions of international money will become stronger in the future. This encouraged the author to assess the consequences of the renminbi internationalisation, in particular the impact on the stability of the international monetary system. An additional aim of the paper is to present the possible scenarios for reform of the international monetary system and assess whether the Chinese currency has a chance to become a global currency.

Methods: The assessment of the renminbi’s role in global foreign exchange relations was carried out by analysing the use of Chinese currency in the main functions of international money in official sector (reserve currency, intervention currency, anchor currency) and private sector (investment currency, vehicle currency in international trade and on the foreign exchange market, invoicing and quotation currency) using the Cohen matrix. The author also assessed the benefits for the stability of the international monetary system, resulting from the transition from a system based on the dominance of the US dollar to a multi-currency system, including the renminbi. The study included theoretical research (analysis of the literature and research reports) and empirical research (analysis of statistical data).

Results and conclusions: The author confirmed the research hypothesis: An increase in the use of renminbi in the functions of international currency will increase the stability of the international monetary system by reducing the dependence of this system on the single currency, which is the US dollar.


international monetary system stability scenarios renminbi international currency SDR

Article Details

Author Biography

Katarzyna Twarowska, Maria Curie-Skłodowska University in Lublin

Katarzyna Twarowska is a graduate assistant at World Economy and European Integration Chair at Maria Curie-Skłodowska University in Lublin, Poland (UMCS, Faculty of Economics). He received her master degree in UMCS in 2012. She has authored about 40 referred articles, most of which relate to international finance, the international monetary system and exchange rates. In her research work she specialises in international economics and European integration and especially in international monetary system.

The proceeding paper has been extended by:

  • a more comprehensive approach to the problem, which is reflected in the new title of the paper ‘THE IMPACT OF THE RENMINBI INTERNATIONALIZATION ON THE GLOBAL MONETARY ORDER’,
  • two points are added: ‘PROPOSALS FOR IMS REFORMS TO ENHANCE THE STABILITY OF THE SYSTEM’ and ‘INCLUSION OF RENMINBI IN SDR BASKET‘, which allowed for a more comprehensive fulfilment of the paper objectives. Among the analysed IMS reform scenarios, the proposals of the International Monetary Fund, the group of economists from European Central Bank, the group of economists (I. Angeloni and others), as well as J. Ricards, J. Frankel and others are taken into account.
  • additional studies on the instability of the international monetary system are presented (point 3. SOURCES OF INSTABILITY IN CONTEMPORARY IMS)
  • statistical data are updates (tables and graphs)
  • additional data are analysed (table 2).
How to Cite


  1. Aliber R.Z., A Lego Approach to International Monetary Reform, Atlantic Economic Journal, vol. 44, issue 2, 2016.
  2. Angeloni I., Benassy-Quere A., Carton B., Darvas Z., Destais C., Pisani-Ferry J., et al., Global currencies for tomorrow: a European perspective, CEPII Research Report 2011-01/Bruegel Blueprint 13, 2011.
  3. Bénassy-Quéré A., Capelle D., On the Inclusion of the Chinese Renminbi in the SDR Basket, CESIFO Working Paper, No. 3989, Novembers 18, 2012.
  4. Bénassy-Quéré A., Forouheshfar Y., The impact of yuan internationalization on the euro-dollar exchange rate, CEPII Working Paper, pp 1-30, 2013 – 14.
  5. Bénassy-Quéré A., Forouheshfar Y., The impact of yuan internationalization on the stability of the international monetary system, Journal of International Money and Finance, vol. 57, pp 115-135, 2015.
  6. Bénassy-Quéré A., Pisani-Ferry J., What international monetary system for a fast-changing world economy? In: Boorman, J., Icard, A. (Eds.), Reform of the International Monetary System – The Palais-Royal Initiative. SAGE, 2011.
  7. BIS, Triennial Central Bank Survey. Global foreign exchange market turnover in 2016, Monetary and Economic Department,, (September 7, 2018).
  8. Cardoso A., The impact of the Chinese exchange policy on foreign trade with the European Union. Brazilian Journal of Political Economy, 37(4/149), 2017.
  9. COFER, Currency Composition of Official Foreign Exchange Reserves, International Monetary Fund,, (May 5, 2019).
  10. Cohen B.J., Dollar dominance, euro aspirations: recipe for discord? J. Common Mark. Stud. 47, 2009.
  11. Constâncio V., The Future of the International Monetary System, The Golden Series lecture at the Official Monetary and Financial Institutions Forum (OMFIF), London, 23 November 2011,
  12. Cruz P.C., Gao Y., Song L.L., The People Republic of China’s Financial Markets: Are They Deep and Liquid Enough for Renminbi Internationalization?. ADBI Working Paper 477. Tokyo: Asian Development Bank Institute, 2014,
  13. Dorrucci E., McKay J., The international monetary system after the financial crisis, ECB Occasional Paper Series, no. 123, February 2011.
  14. ECB, The international role of the euro, July 2017.
  15. Eichengreen B., Chitu L., Mehl A., Network Effects, Homogeneous Goods and International Currency Choice. New Evidence on Oil Markets from an Older Era, “ECB Working Paper Series”, no 1651, March 2014.
  16. Eichengreen B., Exorbitant Privilege. The Rise and Fall of the Dollar, Oxford University Press, 2011.
  17. Eichengreen B., Hegemonic Stability Theories of the International Monetary System, NBER Working Paper Series, no. 2193, 1987.
  18. Eichengreen, B, Mehl A., Chiţu L., Mars or Mercury? The Geopolitics of International Currency Choice, NBER Working Paper, WP 24145, 2017.
  19. Frankel J., How to Cope with Volatile Commodity Export Prices: Four Proposals, HKS Faculty Research Working Paper Series, RWP17-033, August 2017.
  20. IMF, Reserve Accumulation and International Monetary Stability, April 13, 2010,
  21. IMF, World Economic Outlook Database April 2019,, (May 5, 2019).
  22. Jenkins P., Zelenbaba J., Internationalization of the renminbi: what it means for the stability and flexibility of the international monetary system, Oxford Review of Economic Policy, vol. 28, no 3, pp512-531, 2012.
  23. Keynes J.M., The Collected Writings, Volume XXV: Activities , 1940-44 – Shaping the Post-war World: The Clearing Union, Basingstoke, 1980.
  24. Mucha-Leszko B., Kąkol M., Globalizacja i zmiany w układzie sił gospodarczych a międzynarodowy system walutowy, [in:] E. Molendowski (ed.), Globalizacja i regionalizacja we współczesnym świecie, Wydawnictwo Uniwersytetu Ekonomicznego w Krakowie, Kraków 2012.
  25. Mucha-Leszko B., Kąkol M., Portugalia w unii walutowej – problemy gospodarcze i kryzys finansów publicznych, Ekonomista, nr 4, 2011.
  26. Mucha-Leszko B., Twarowska K., Czynniki i skutki destabilizacji kursów walutowych po upadku systemu walutowego z Bretton Woods, Studia Ekonomiczne. Zeszyty Naukowe Uniwersytetu Ekonomicznego w Katowicach, no 266, 2016.
  27. Mundell R., Financial crises and the International Monetary System, Columbia University New York, NY 10027 March 3, 2009.
  28. Ricards J., The Death of Money. The Coming Collapse of the International Monetary System, Penguin Random House UK, 2014.
  29. SWIFT, RMB Tracker. Monthly reporting and statistics on renminbi (RMB) progress towards becoming an international currency, April 2019.
  30. Twarowska K., Analysis of the use of the Chinese renminbi as an international currency. Proceedings of the 31st International Business Information Management Association Conference IBIMA. Ed. Soliman K.S., Italy, 2018.
  31. Twarowska K., Rola SDR w perspektywie zmian zasad funkcjonowania międzynarodowego systemu walutowego, Acta Universitatis Lodziensis. Folia Oeconomica, 3(335), 2018.
  32. Twarowska K., The impact of the renminbi internationalization on stability of the international monetary system, [in:] Proceedings of the 5th International Multidisciplinary Scientific Conference on Social Sciences & Arts SGEM 2018, Conference Proceedings, Volume 5, Modern Science, Issue 1.6, 23-26 October, 2018, Florence, Italy, DOI:
  33. UNCTAD, UNCTADStat Data Center,, (May 5, 2019)
  34. World Gold Council,