Renminbi in ASEAN economy: How ASEAN responds to Renminbi internationalization

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Chinese Yuan Renminbi has been included in IMF Special Drawing Right since the end of 2015. This momentum notified the increasing importance of Renminbi (RMB) as a rising star of international currency. ASEAN plus 3 has responded to RMB internationalization and the Asian financial crisis by the Chiang Mai Initiative of Multilateralization (CMIM). This paper will explore the impact of RMB internationalization on the movement of ASEAN member exchange rates. This research would provide empirical evidence that RMB has already become an important force in impacting the exchange rate of ASEAN currencies. The framework of the empirical model from Frankel and Wei (1994) and Ogawa and Shimizu (2006) are used to answer these questions. This research found that the effects of Renminbi internationalization are significant in explaining ASEAN currency movements, especially after ASEAN China FTA (ACFTA). There is empirical evidence that increasing trade between ASEAN and China could facilitate the increase use of RMB in the ASEAN foreign exchange market.

Original languageEnglish
Pages (from-to)1-24
Number of pages24
JournalJournal of Economic Cooperation and Development
Issue number3
Publication statusPublished - 1 Jan 2019


  • ASEAN China FTA
  • Exchange rate
  • International currency
  • Renminbi


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