2021
DOI: 10.2139/ssrn.3894751
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Fundamentals vs. Policies: Can the US Dollar's Dominance in Global Trade Be Dented?

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Cited by 9 publications
(5 citation statements)
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“…In turn, if a firms is pricing exports in a currency it has an incentive to get credit for working capital in that currency as well (Bahaj and Reis, 2020b). Empirically, Bahaj and Reis (2020b), Song and Xia (2020), Georgiadis et al (2021) find that the PBoC's swap lines are associated with an increased use of the RMB for cross-border payments and for trade invoicing. Insofar as there are rewards of having an international currency, this provides a separate benefit of the liquidity lines.…”
Section: Liquidity Lines As a Tool To Encourage International Trade A...mentioning
confidence: 97%
See 1 more Smart Citation
“…In turn, if a firms is pricing exports in a currency it has an incentive to get credit for working capital in that currency as well (Bahaj and Reis, 2020b). Empirically, Bahaj and Reis (2020b), Song and Xia (2020), Georgiadis et al (2021) find that the PBoC's swap lines are associated with an increased use of the RMB for cross-border payments and for trade invoicing. Insofar as there are rewards of having an international currency, this provides a separate benefit of the liquidity lines.…”
Section: Liquidity Lines As a Tool To Encourage International Trade A...mentioning
confidence: 97%
“…For example, over the course of 2014 and 2015 the central bank of Argentina (BCRA) borrowed RMB to buy USD in order to bolster its reserves, although none of the USD appear to have been spent (McDowell, 2019). This goes against the typically stated goal of the PBoC's swap lines being for trade settlement (Georgiadis et al, 2021). However, the PBoC did not publicly protest the arrangement and some sources report that the BCRA's move had the PBoC's tacit approval (Tresor Economics, 2018).…”
Section: The Recipient Central Bank's Use Of the Moneymentioning
confidence: 99%
“…11 Much of this increase in RMB invoicing has been concentrated in Asia, with Cambodia, Korean, Taiwan, Thailand and India invoicing 1%-3% of their cross-border merchandise transactions in RMB in 2020. This is a multiple of the global average (see Georgiadis et al, 2021). Mongolia is an outlier: about 20% of its trade was invoiced in RMB in 2020.…”
Section: The Rmb Punching Below China's Global Economic Weightmentioning
confidence: 99%
“…This effect is increasing in the share of imports invoiced in US dollars (Ma, Schmidt-Eisenlohr, and Zhang 2020). In turn, the share of US dollar-denominated trade invoicing correlates positively with economies' participation in global value chains (GVCs) because of the strategic complementarity between price setting and integration in GVCs (Georgiadis et al 2021…”
Section: Risks Of Entrenched Us Dollar Dependencementioning
confidence: 99%