{
  "title": "Reserve Currency Blocs: A Changing International Monetary System?",
  "publication": "IMF Working Papers, January 24, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/01/25/reserve-currency-blocs-a-changing-international-monetary-system-45586",
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  "summary": "What is the extent of currency diversification in the international monetary system? How has it evolved over time? In this paper, we quantify the degree of currency diversification using regression methods of currency co-movements to determine the extent to which national currencies across the world",
  "sections": [
    {
      "heading": "Research questions and approach",
      "content": "- What is the extent of currency diversification in the international monetary system? How has it evolved over time?\n- Quantification approach:\n  - Use regression methods of currency co-movements to determine the extent to which national currencies across the world belong to a reserve currency bloc.\n  - Use these estimates to calculate the economic size of each currency bloc.\n- Key contribution: quantification of the size of the Chinese renminbi (RMB) bloc."
    },
    {
      "heading": "Major findings",
      "content": "- The international monetary system has transitioned from a bi-polar system (U.S. dollar and the euro) to a tri-polar one that includes the renminbi.\n- Estimated global GDP shares by currency bloc:\n  - U.S. dollar bloc: 40 percent\n  - Renminbi (RMB) bloc: 30 percent\n  - Euro bloc: 20 percent\n- Geographic and currency-specific observations:\n  - The geographical area of influence for the RMB bloc appears to be most evident among the BRICS’ currencies.\n  - The British pound and the Japanese yen blocs appear to play minor roles."
    },
    {
      "heading": "Implications and interpretation",
      "content": "- The continued dominance of the dollar bloc (40 percent of global GDP) suggests persistence of dollar-centric dynamics in the international monetary system despite growing RMB influence.\n- Emergence of a sizeable RMB bloc (30 percent of global GDP) indicates meaningful progress in RMB internationalization and regional influence, particularly among BRICS economies.\n- The euro bloc’s estimated share (20 percent of global GDP) reflects its continued importance but secondary role relative to the dollar and RMB blocs.\n- Minor roles for the pound and yen blocs imply limited global reserve-currency contagion or bloc membership associated with those currencies.\n\nSource: IMF Working Paper — \"Reserve Currency Blocs: A Changing International Monetary System?\" by Camilo E Tovar Mora and Tania Mohd Nor (January 24, 2018).\n\n---\n\n Content in this bundle\n\n- Reserve Currency Blocs: A Changing International Monetary System?, WP/18/20, January 2018\n  - Reserve Currency Blocs: A Changing International Monetary System?, WP/18/20, January 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Reserve Currency Blocs: A Changing International Monetary System?, WP/18/20, January 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/01/25/reserve-currency-blocs-a-changing-international-monetary-system-45586"
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    "Authors: Camilo E Tovar Mora, Tania Mohd Nor",
    "Published: January 24, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484338704.001",
    "What is the extent of currency diversification in the international monetary system? How has it evolved over time?",
    "Quantification approach:",
    "Key contribution: quantification of the size of the Chinese renminbi (RMB) bloc.",
    "The international monetary system has transitioned from a bi-polar system (U.S. dollar and the euro) to a tri-polar one that includes the renminbi.",
    "Estimated global GDP shares by currency bloc:",
    "Geographic and currency-specific observations:",
    "The continued dominance of the dollar bloc (40 percent of global GDP) suggests persistence of dollar-centric dynamics in the international monetary system despite growing RMB influence.",
    "Emergence of a sizeable RMB bloc (30 percent of global GDP) indicates meaningful progress in RMB internationalization and regional influence, particularly among BRICS economies.",
    "The euro bloc’s estimated share (20 percent of global GDP) reflects its continued importance but secondary role relative to the dollar and RMB blocs.",
    "Minor roles for the pound and yen blocs imply limited global reserve-currency contagion or bloc membership associated with those currencies.",
    "**Reserve Currency Blocs: A Changing International Monetary System?, WP/18/20, January 2018**"
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