RMB Internationalization: An Open-Economy Trilemma – A Commentary by Edwin Lai for the Hong Kong Economic Journal

Published on: 2016-01-05


The Hong Kong Economic Journal carried a commentary by IEMS’ Edwin Lai which looked into the difficulties the RMB faces and the pace of its internationalization in coming years. Explaining the restrictions in an “Open-Economy Trilemma”, he said it is impossible to achieve a stable foreign exchange rate, free capital movement and an independent monetary policy simultaneously. He predicted the RMB in 2016 would face difficulties in its internationalization due the slower growth and a reduction in Chinese trade volumes, the expectation of RMB depreciation, and lower interest rate, but that the currency would go up again in five to ten years with continued reforms and the opening of the mainland finance market.

Read the full article here: Hong Kong Economic Journal (Chinese Only)

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