The Choice Of Invoicing Currency In Foreign Trade Of Asean

Trade is an important factor of currency internationalization, and this is mainly due to the function of currency (trading/invoicing). Traditional view agreed that the trade advantage of a country will help the internationalization of currency. From this perspective, this paper studies the choice of invoicing currency in foreign trade of ASEAN (Association of South-East Asian Nations), in order to explore how the RMB as an invoicing currency to replace the US dollar in bilateral trade between china and ASEAN in the mid-long time.This article analyzes the choice of invoicing preference of ASEAN’s foreign trade from two aspects of the trade and finance. If the trade is taken as the only determinant factor of invoicing currency, US dollar cannot be used as the only one of the dominant invoicing currency in ASEAN, and Singapore Dollar, YEN and RMB may be used as one of the dominant invoicing currency. If the financial factors such as inflation rate, exchange rate fluctuations are taken as the only decision factors of invoicing currency, it can be seen that most of the ASEAN countries have preferences to foreign currency.In practice of currency settlement of ASEAN, US dollar plays a leading role, the Yen second, the Euro last. The dominant position of US dollar denomination in the ASEAN region will not change in the short term, mainly due to the inertia of dollar and low transaction cost of dollar. Denomination and settlement of Yen in the ASEAN region cover a certain proportion because of Japanese production bases throughout Southeast Asia. Chinese government promote RMB-denominated so active that the share of RMB invoicing is expanding fast. China’s size of the economy and RMB-denominated size doesn’t match in ASEAN, but RMB-denominated promotion has broad prospects because of free trade agreement. In this paper, we combined the structure of ASEAN’s foreign trade with invoicing preferences based on the fluctuation of exchange rate, giving a proposal for the promotion of RMB-denominated in the ASEAN region.