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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).


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