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The present article relies on an original institutional economics perspective of the international monetary system to argue that contrary to what is generally maintained in international relations literature, China's effort to internationalize the renminbi has not stalled after its inclusion in the International Monetary Fund's (IMF) Special Drawing Rights in 2015. This argument rests upon on the evaluation of the global petroleum market as a possible reinforcement of China's establishment of the renminbi as an international unit of account and means of payment through its participation in both fossil and renewable energy markets. To that end, we analyze China's energy-yuan strategy aimed at both fostering renminbi internationalization and securing energy provision. [ABSTRACT FROM AUTHOR]

The up‐and‐coming influence of the RMB on currency co‐movements is examined in this paper, in the context of a transpiring tri‐polar international monetary system advocated in prior studies. The study is empirically conducted against the backdrop of a more variable RMB exchange rate regime, which enables the integration of the RMB into the international monetary system. The influence of the RMB is found most evident in Asia, being modest in Latin America while reaching Africa. The RMB co‐moves most with the currencies of countries that have large shares in trade with China considerably. Meanwhile, a residual‐based instrumental variables model is proposed in this study purposely for dealing with issues of common factor dominance, which prevails in currency co‐movements. The emerging influence of the RMB on currency co‐movements arises at the time when a multiple‐reserve currency system is coming, and the RMB is included as the third largest currency in the SDR basket. It is shored up by the improved infrastructure, strengthened central bank cooperation and expanded networks for cross‐border RMB payments and settlements. It is concluded that the RMB has increasingly integrated into the international monetary system as one of the major players, effecting currency market movements actively alongside the US dollar and euro. [ABSTRACT FROM AUTHOR]

The notion that the international monetary system is hierarchical has become increasingly common, but the nature, causes, and shape of international monetary hierarchy remain vague. In this article, we develop a monetary theory of international hierarchy based on the "key currency" approach. We perceive the international monetary system as a world-spanning payment system that is inherently hierarchical because it needs central nodes for clearing and settlement. The centrality of the US-Dollar (USD) as global key currency places the US at the apex and makes the Federal Reserve (Fed) the system's hierarchically highest institution. Other monetary jurisdictions are pushed into peripheral positions and rely on both using and creating USD-denominated credit money instruments "offshore." Based on this approach, we explain international monetary hierarchy through different mechanisms to supply emergency USD liquidity from the Fed to non-US central banks. Currently, there are three different public mechanisms for non-US central banks to access the Fed's balance sheet and attain emergency USD liquidity. The first-layer periphery may receive emergency USD liquidity via the Fed's central bank swap lines. The second-layer periphery can make use of the Fed's new repo facility for Foreign and International Monetary Authorities to access emergency USD liquidity. The residual mechanism for the third-layer periphery to access emergency USD liquidity is the Special Drawing Rights system, administered by the International Monetary Fund, in which the Exchange Stabilization Fund acts as gatekeeper for the Fed. [ABSTRACT FROM AUTHOR]

The special drawing right (SDR) is issued by the International Monetary Fund (IMF). The SDR has the potential to strengthen dramatically the international monetary system. Established in 1969 and allocated twice during its first decade, the SDR was in the institutional closet from 1980 until 2009 when $250 billion in SDRs were allocated to members of the IMF to help address the global financial crisis. In 2021, another $650 billion in SDRs were allocated to help address the Coronavirus pandemic. The SDR has proved itself as a crisis instrument. This paper proposes regular annual SDR allocations. [ABSTRACT FROM AUTHOR]

We analyse the determinants of RMB as an international reserve currency and the impact of joining the Special Drawing Rights (SDR) on the currency swap agreements between China and other countries. A panel logit model is estimated using annual data for China and 33 countries for the period from 2009 to 2018. The results show that the relative economic size, trade dependence, interest rate differential, and geopolitical relation are important for determining the likelihood of signing the RMB bilateral swap agreements between China and the partner countries. Our analysis also reveals that RMB's inclusion in the SDR was an important factor raising the probability of concluding an RMB bilateral swap agreement. [ABSTRACT FROM AUTHOR]

International climate finance is key to managing overall climate risk with many developing countries' climate plans and actions are conditional on getting the necessary financial support. Unsurprisingly, helping fund poorer countries to address climate change is one of the most contentious subjects in climate politics. This article examines the state of play and offers some suggestions to unblock the impasse. [ABSTRACT FROM AUTHOR]

Copyright of Prawo Budżetowe Państwa i Samorządu is the property of Nicolaus Copernicus University in Torun, Faculty of Law & Administration and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article discusses the potential rise of the Chinese Yuan (RMB) as a rival to the US Dollar as a reserve currency in the international monetary system. It presents two scenarios for the future: one where economic and financial ties between the US and China continue despite high tariffs and other measures, and another where these ties are ruptured due to military aid or invasion. The author also explores the reasons behind China's pursuit of RMB internationalization, dating it back to the 2008 global financial crisis. They suggest that the Russian invasion of Ukraine and subsequent western sanctions have accelerated the use of the RMB, with countries diversifying their foreign reserves away from the US Dollar. [Extracted from the article]

Maes and Pasotti might have taken the opportunity to contribute to a better understanding of Triffin's view of a polycentric monetary system grounded on the use of supranational currencies issued by regional central banks. Robert Triffin's intellectual heritage rests on one major tenet: namely, that an international monetary and financial system (IMS) based on a single national currency is inherently unstable. This diagnosis - the Triffin dilemma - conferred on Triffin a prominent role in international monetary debates as a policy-oriented economist. [Extracted from the article]

Cryptocurrencies have taken the world by storm. But these decentralized and unregulated digital fiat currencies have more in common with the currencies of ages past than many believe. These commonalities may result in the incorporation of new cryptocurrencies into older institutions. One such institution is the International Monetary Fund's Special Drawing Rights (SDRs), which has been relegated to an afterthought in the international monetary system since the Nixon Shock in 1971. The Fund's Managing Director recently made comments that indicated that the Fund is exploring the incorporation of a cryptocurrency into the framework of the SDR, a change which China and other emerging economies are bound to encourage because it would likely move the international monetary system away from the use of the powerful U.S. dollar as a reserve currency. Because the U.S. dollar remains the most important currency within the international monetary system, this Article first explores the legal status of U.S. currency and the creation of Bretton Woods after World War II and its implosion after the Nixon Shock. It then discusses the basic functions of SDRs and their past uses. Finally, this Article explores two options that the Fund may have in incorporating cryptocurrencies into SDRs: (1) redefining the SDR as its own unique cryptocurrency; and (2) incorporating a specific cryptocurrency within the SDR's basket of currencies. [ABSTRACT FROM AUTHOR]

Financial crisis is nothing new in the annals of history of the capitalistic path of economic development; it is a part of the business cycle. The theoretical basis is well entrenched in the concept of 'Keynesian Cross'. The tale of crisis, dating back centuries, has taken a new turn with the call for more globalization--liberalize trade and open up the financial sector. This has made many nations vulnerable to crises that are likely to be repeated, perhaps frequently. Based on recent experience, warning signs can be read from the dollar-centric exchange rate, the mainstay for the stability of the current global financial system. To a careful observer, fatigue in the system cannot be overlooked. [ABSTRACT FROM AUTHOR]

China and the international monetary system need each other. The international monetary system is strained, with crisis just around the corner, yet reform is not on anyone's agenda. Meanwhile China, deeply invested in the current system, faces narrowing options as trading partners question its moves abroad, debt levels rise at home, and its current account moves from surplus to deficit. RMB internationalization might appear to provide a way out, but the policy has its limits and tends to exacerbate rather than relieve tensions. We argue that a tension-reducing solution is at hand to the problems of both the international monetary system and China--IMF-style Special Drawing Rights (SDRs). If in a unilateral initiative China were to make the SDR central to its next phase of capital account opening, China's institutions, corporates and individuals--presently restricted in their access to international currency--would likely embrace it. Begun by China, with support from the international community and Hong Kong, promulgation of the SDR would usher in an era of lower tensions, providing space for development and avoidance of conflict within a reordered monetary system in which China would have a more prominent role. [ABSTRACT FROM AUTHOR]

Copyright of Industry / Industrija is the property of Economics Institute and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Special Drawing Rights are reserve assets which ought to provide liquidity in times of a country's financial distress. It is a potential claim on freely usable currencies of International Monetary Fund member countries. This article examines the possible effects of a global Special Drawing Rights implementation by the International Monetary Fund in case of a collapse of one of the major currencies. The question addressed is if a distressed fiat currency can be bailed out effectively by triggering the designation mechanism to the International Monetary Fund member countries The results indicate that the liquidity benefit per created Special Drawing Rights unit would proportionally increase with the rate of money supply. [ABSTRACT FROM AUTHOR]

The article provides an econometric analysis of the reserve-asset behavior of the outer countries over a time span of the international monetary system, between 1958, the year the system entered its "crisis zone" and 1967, when an agreement on the special drawing rights (SDR) reform of the system was reached. Tested are the changing reactions of these countries as the system drew closer into the crisis zone. Additional topics include an outer country's economic dependence on the U.S., U.S. foreign aid, and U.S. diplomatic activity.

This paper attempts to show that the method for distributing SDRs adopted through the Rio Agreements was designed not to lead to the redistribution of income and wealth among nations either on the occasion of the initial allocations or through the use of the SDRs in the financing of temporary deficits. This objective may not be attained because IMF quotas fail to reflect nations' long-run average demand for reserves or because the quantity of reserves in existence fails to establish an average equality of interest plus liquidity yield on SDRs to the marginal productivity of real resources. If the Rio Agreements are deficient in these respects, relatively simple technical adjustments in the operation of the scheme are necessary. [ABSTRACT FROM AUTHOR]

This article focuses on the political economy that shaped the Special Drawing Right (SDR) by examining the three drivers of reform that influenced the creation of the SDR and resulted in changes in the international monetary system (IMS) and the International Monetary Fund (IMF). The three factors examined are, first, informal intergovernmental forums working outside the framework of the IMF; second, the eclipse of the IMF as the central institution of the IMS; and finally, the lack of reference to the private sector in the discussions, even though capital movements were the central cause of strains in the IMS. The article concludes that the resulting limitations of the SDR solution-an institutional change brought about by the compromise between parties to the discussions-meant that major imperfections in the IMS remained unresolved. [ABSTRACT FROM AUTHOR]

However, the e-CNY by itself will make little difference to the renminbi as a reserve currency. In 2016, the International Monetary Fund (IMF) included the renminbi in an elite basket of currencies that comprise the Special Drawing Rights, making it an official reserve currency. Keywords: E40; E42 EN E40 E42 251 252 2 07/06/22 20220701 NES 220701 Xu (2022) provides an overview of the structure and purpose of China's e-CNY and also discusses its implications for the international monetary system. [Extracted from the article]

In the late-1960's, international discussions over a possible reform of the international monetary system originated the Special Drawing Right (SDR). While they had been created initially to represent an additional asset to complement the existing reserves of U.S. dollars and gold, after the crisis of the Bretton Woods system the SDR was considered a possible substitute of the U.S. dollar. Relying on a consolidated literature, this article aims at demonstrating that the origins of the SDR were not the exclusive result of technical financial negotiations, but of the convergence of higher political interests against the United States and the dollar dominance. [ABSTRACT FROM AUTHOR]

Jeffrey Garten is a policy advisor turned investment banker turned academic. Garten views the Camp David meeting as marking a transition for the United States from the post-World War II period during which the United States was the dominant player on international economic and financial issues to a new environment in which the United States was less dominant and had to share power and responsibilities. [Extracted from the article]

The paper argues that at present the overhaul of the global economic and financial architecture evolves on four different, although interdependent tracks: re-basing the international monetary system; recognizing the role of emerging economies in global governance; reinforcement of the special drawing rights (SDRs); and the restoration of the gold standard. The paper puts forward three scenarios for the evolution of the international monetary system, including the Repair and Improve Scenario, the Multi-polar/Bipolar Scenario, and the Renewed Multilateralism Scenario, underscoring that the Multi-polar Scenario is seen as the most likely in the medium term. [ABSTRACT FROM AUTHOR]

This paper studies the impact of a broadening of the SDR basket to the Chinese currency on the composition and volatility of the basket. Although, in the past, RMB inclusion would have had negligible impact due to its limited weight, a much more significant impact can be expected in the next decades. If the objective is to reinforce the attractiveness of the SDR as a unit of account and a store of value through more stability, then a broadening of the SDR to the RMB could be appropriate, provided some flexibility is introduced in the Chinese exchange-rate regime. This issue of flexibility is de facto more important than that of "freely usable" to make the SDR more stable, at least in the short and medium run. [ABSTRACT FROM AUTHOR]