China's Bilateral Currency Swap Lines

Lin, Zhitao; Zhan, Wenfeng; Cheung, Yin‐Wong

doi:10.1111/cwe.12179

Cited by 22 publications

(11 citation statements)

References 18 publications

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“…The effects of these linkages are presented in Table 4. 17 Cheung and Yiu (2017). Garcia-Herrero and Xia (2015), Lin et al (2016) and Eichengreen and Lombardi (2017), for example, study China's swap line policy, and the determinants of the choice of counter-part countries and swap line amounts.…”

Section: Empirical Results IImentioning

confidence: 99%

The evolution of offshore renminbi trading: 2016 to 2019

Cheung

Grimm

Westermann

2021

Journal of International Money and Finance

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We study the evolution of offshore renminbi trading between 2016 and 2019. The diffusion behaviour of offshore renminbi trading during this period is different from the one between 2013 and 2016. The geographical diffusion process displayed in the 2016-2019 period, in addition to the previously reported convergence to the geographical trading pattern of all currencies, is affected by trade intensity, bilateral swap line arrangements, and has a regional bias. Further, it is possibly affected by disputes with China, and is different from the diffusion behaviours of the offshore US dollar, euro, British pound, and Japanese yen trading.

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Section: Empirical Results IImentioning

confidence: 99%

The evolution of offshore renminbi trading: 2016 to 2019

Cheung

Grimm

Westermann

2021

Journal of International Money and Finance

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“…We now apply the instrumental variable regression to control for both endogeneity and non-stationary concerns. Given the endogenous nature of the variables, we follow Lin, Zhan and Cheung (2016), and consider the political and institutional variables discussed in Table 4 as the exogeneous factors, and use the following regression.…”

Section: Regression Resultsmentioning

confidence: 99%

“…Previous research studies, including Garcia-Herrero and Xia (2015) and Liao and McDowell (2015), find that the PBoC put emphasis on its trade relationship with the potential candidate although some other factors, including political relationships and societal institutional characteristics, also play a role in the singing of BSAs. Moreover, according to Lin et al (2016) concludes that these RMB BSAs are rarely being tapped.…”

Section: Background and Datamentioning

confidence: 99%

“…where the dependent variable is a dummy which equals one if country i has a signed BSA with China in month m, and zero otherwise. The contains a number of explanatory variables, which are used in previous studies to predict the BSA signing (see Garcia-herrero and Xia, 2015;Liao and McDowell, 2015;Lin et al, 2016). These explanatory variables include:…”

Section: Endogeneity Of Bsa Signingmentioning

confidence: 99%

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Bilateral swap agreement and renminbi settlement in cross-border trade

Song

Xia

2020

Economic and Political Studies

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This research empirically examines the impact of China's Renminbi (RMB) bilateral swap agreements (BSAs) on the usage of the currency in cross-border trade transactions. By using a unique dataset from SWIFT including cross-border settlement messages of 91 countries/regions between October 2010 and November 2015, we confirm that the signing of a RMB BSA helps to increase the number, the value and the proportion of RMB settlement in cross-border trade. Our results are robust with respect to the choice of different models, including multi-level mixed model, two-stage regression model, and difference-indifference model. In addition to justifying the effectiveness of China's BSA-signing strategy to promote the RMB usage in trade settlement, our results clarify that the signing of those RMB BSAs is not purely for China's political ends as some scholars claim.

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“…The empirical section then addresses important questions not explored in previous studies. Specifically, the analysis uses the dataset to examine the motivations behind BSLs, where EMs and developing countries are recipients, complementing analysis by Aizenman et al (2021) that examined motivations behind the Fed's BSLs during the recent COVID-19 pandemic and Lin et al (2016) that tested the determinants of Chinese BSLs. In addition, this paper tests how effective these BSLs have been at stabilizing market conditions, including during the COVID-19 pandemic.…”

Section: Introductionmentioning

confidence: 99%

Evolution of Bilateral Swap Lines

Tokuoka¹,

Shin²,

Rao³

et al. 2021

IMF Working Papers

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This paper makes contributions to the study of bilateral swap lines (BSLs). First, this paper fills a BSL information gap by constructing a comprehensive database of BSLs based on publicly available information, including after the onset of the COVID-19 pandemic. Second, the paper provides the results of regression analysis exploring several empirical questions that were not covered in previous studies. The paper documents the evolution of BSLs into an important part of the Global Financial Safety Net (GFSN), with some helping to stabilize financial market during both the Global Financial Crisis (GFC) and the COVID-19 pandemic. Analysis suggests that countries on the recipient side of BSLs are more likely to sign and renew BSLs designed to alleviate balance of payments needs as their external position weakens. U.S. Federal Reserve BSLs appear to have been effective at stabilizing financial market conditions during the COVID-19 pandemic. IMF WorkingPapers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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China's Bilateral Currency Swap Lines

Cited by 22 publications

References 18 publications

The evolution of offshore renminbi trading: 2016 to 2019

The evolution of offshore renminbi trading: 2016 to 2019

Bilateral swap agreement and renminbi settlement in cross-border trade

Evolution of Bilateral Swap Lines

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