Here’s a picture of the RMB’s role as a reserve and vehicle currency, from an ongoing project with Jeffrey Frankel and Hiro Ito, where we examine the determinants of individual central bank reserve holdings.
Figure 1: Simple average of holdings of RMBs among central banks reporting RMB holdings in Ito-McCauley database (blue), average holdings of RMBs among central banks reporting holdings to IMF (red), turnover of RMBs (out of 1) (green), share of GDP in world GDP (yellow), simple average of trade share with China (purple). Turnover is linearly interpolated between BIS triennial surveys. 2023 COFER holdings for first three quarters. Source: Ito-McCauley database, COFER, BIS, author’s calculations.
Note that COFER share holdings in RMB is lower than simple average of RMB holdings which means that in general it’s smaller central banks holding more RMBs. Further note that RMB holdings have seemingly stalled out in 2023.
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