Currency is the blood of a country's economy, and it is also an important embodiment of national strength and status. In today's world, the U.S. dollar still dominates the international monetary system, and as the world's largest economy, the U.S. relies on its strong economic strength to support the dollar's international influence.
In recent years, with the rise and development of emerging market countries, the hegemony of the US dollar is being challenged by currencies such as the euro and the yuan. As the world's second largest economy, the eurozone is accelerating the expansion of the euro's share of the international market by promoting economic integration and political integration.
At the same time, the rapid growth of China's economy has also made the renminbi gradually become an important international payment and settlement currency, and the momentum of renminbi internationalization is accelerating.
So, what is the international money market? The international currency market is the market where currencies are traded and circulated, including the foreign exchange market, the international bond market, and other regional currency markets. In this market, there will be a lot of exchange, trading, and movement between currencies of different countries or regions.
We usually use the total transaction volume or circulation of a certain currency in the international currency market to measure its status and influence in the international market, which is the proportion of the currency in the international market. At the same time, in order to ensure the security of their own economy and cope with the crisis, countries will hold a certain amount of foreign exchange reserves, which are called international reserve currencies.
The proportion of a currency in the total international reserve currency is the proportion of the international reserve currency. In addition, the currency used in the payment and settlement of international**, investment and other economic activities is the international payment currency, and the proportion of a currency used in international payment can also reflect its international status.
Statistics show that for a long time, the US dollar has dominated the international currency market. In June 2022, the share of international payments in the US dollar was 4202%, which is the highest among all countries. This is largely due to the strong economic power of the United States, its abundant financial assets, and its dominance in the international economic system.
However, with the development of the economies of emerging market countries, the absolute advantage of the dollar is gradually being weakened. It is expected that the share of the US dollar in the international market will continue to decline in the coming decades.
In second place is the euro, which accounted for 31 percent of international payments in June 202225%。As a product of the EU's economic integration, the euro embodies the close political and economic integration of European countries. At present, Brexit has led to a decline in the economic strength of the European Union, and the European debt crisis and other issues have not been fully resolved, which are all threats to the development of the euro. However, in the long run, the euro is expected to further enhance its international competitiveness as the EU economy expands.
The proportion of RMB international payments, which ranks fifth, is also increasing year by year, reaching 277%。This is mainly due to the sustained rapid growth of China's economy, ranking first in the world in terms of foreign exports, and China's policy of vigorously promoting the internationalization of the RMB.
At present, China is carrying out investment cooperation with neighboring countries through the "Belt and Road" initiative, and promoting the use of RMB in investment and financing settlement, which has laid a solid foundation for the future development of RMB. It is expected that as China's economic strength further increases, the renminbi is expected to become the world's third largest payment currency within 10 years.
To sum up, in today's world, the dollar is still dominant, but its unipolar system is being broken. The euro and the renminbi represent the rise of emerging economies, and they will have a significant impact on the existing international monetary landscape. This means both opportunities and challenges. The world's major economies should seize the opportunity to strengthen policy coordination, so that the international status of their currencies can be enhanced, and at the same time, promote the development and prosperity of the world economy.