Empirical Analysis Of The Influencing Factors Of RMB Internationalization

The rapid development of China's economy,the steady implementation of the "One Belt And One Road" initiative,and the continuous expansion of the pilot cross-border RMB settlement have,to some extent,promoted the internationalization of the RMB.In addition,in recent years,the central bank has gradually improved the policy of cross-border use of RMB,steadily promoted the opening of current account,especially capital account,and further injected strong impetus to the international development of RMB.Although RMB has gone through some twists and turns and adjustments in the process of internationalization,it has also achieved a series of breakthrough results.From the perspective of pricing and settlement,this paper studies the influencing factors to promote the internationalization of RMB.Firstly,the paper analyzes the development of RMB as the pricing and settlement currency through the theories of currency internationalization and pricing currency selection.Secondly,according to the international trade settlement currency choice theory,the economic strength,trade scale,financial market and exchange rate are combined as the main factors for studying the internationalization of RMB to analyze the current situation.Test,finally establish the VAR model show that these four variables and the internationalisation of the renminbi has long-term stable relationship,with the help of impulse response and variance decomposition to further analysis of the dynamic changes of the relevant variables,impulse response function analysis it is concluded that the strength of the economic impact,trade impact on the internationalisation of the renminbi is positive,the influence of the impact of exchange rate fluctuations and the impact of the financial market is a negative impact on the internationalisation of the renminbi;The results of variance decomposition show that the contributions to RMB internationalization are successively economic strength,trade scale,exchange rate fluctuation and financial market.The empirical results show that economic strength is the basis of RMB internationalization,and the internationalization of RMB is the inevitable result of China's economic development to a certain stage.Trade scale is a solid force to promote RMB internationalization and an important driving force for RMB internationalization.The stability of currency value is the key to the internationalization of RMB.The fluctuation of exchange rate is not conducive to the internationalization of RMB to some extent.For thefinancial market,in the short term,China's financial market is sensitive to the national policy,which is helpful to promote the internationalization of RMB to some extent.In the long run,there is still a certain gap between China's current financial market and that of Europe and the United States.To some extent,China's financial market is not conducive to the internationalization of RMB.Based on the above conclusions,Suggestions are put forward: as for the government,it is necessary to further deepen the payment monetary function of RMB on the basis of vigorously developing the real economy,so as to better serve the real economy and enhance China's economic strength.Gradually liberalize the control of RMB capital account by optimizing the tools of transitional institutional innovation;And with the two-way opening of the domestic financial market as the driving force,improve the onshore and offshore connectivity.As for financial institutions,relevant financial institutions need to strengthen the innovation of green financial products within the framework of the existing cross-border RMB business policies,and create more products that meet the market demand.And further expand cross-border business network,making business more efficient and convenient.As for foreign trade enterprises,relevant enterprises need to further expand the scale of foreign trade on the basis of the gradual optimization of the trade structure,so as to realize the dual driving of trade and investment.Moreover,reasonable use of payment methods with Chinese characteristics in cross-border trade can better realize RMB internationalization.