Study On Renminbi As Regional Reference Currency In Asia

After30years’ reform and opening, China has become a major leading economy in Asia. Renminbi has been drawing more and more attention and even quoted as "second dollar" in the area. From the perspective of monetary cooperation, this paper tries to find out whether Renminbi has become reference currency in Asia. By reviewing the history of monetary cooperation, especially the aspect of exchange rate coordination, this study finds out the foundation for three major international currency including US dollar, Euro dollar and Yen to be regional reference currency in Asia has been weakening since the financial crisis in2008, on the other hand, Renminbi is more appropriate to be regional reference currency. The empirical test finds out the truth that there exists increasing co-movement between Renminbi and other currency in Asia. The study then makes the conclusion that Renminbi has surpass the US dollar and become the regional reference currency in Asia. At last, the corresponding suggestions about the internationalization of Renminbi are given.