RMB Trade Pricing in the Context of"De-Dollarization"——Based on Bilateral Currency Swap Agreements
Against the background of continuing interest rate hikes by the Federal Reserve and increasingly frequent fi-nancial sanctions,the rest of the world have reduced their reliance on dollar invoicing in trade and financial activities through international monetary cooperation and other means.The rise of the"de-dollarization"trend has brought opportunities for the development of RMB's trade prcing function.This paper constructs an invoicing currency selection model based on the manufacturer's profit maximization,allowing third-party currency pricing.The findings indicate that price stability is an important factor in determining prcing currency.The analysis shows that the bilateral currency swap agreement is helpful to strengthen the function of RMB trade valuation,and its mechanism includes stabilizing RMB exchange rate and improving the confidence of RMB abroad.Using the UNComtrade data from 2005 to 2021,the paper constructs the inter-country trade price dataset to estimate the trade prcing function of RMB.It is found that the bilateral currency swap significantly enhances the trade invoicing function of RMB,and this effect still exists after considering the influence of US dollar.The mechanism test results show that bilateral cur-rency swap agreements enhance the function of RMB trade prcing by stabilizing the exchange rate of RMB against the curren-cies of the signatory countries and enhancing the confidence of RMB internationally.Further analysis in this paper shows that a higher bilateral swap line and a higher level of currency internationalization among signatory countries will improve the effect of bilateral currency swap agreement on RMB trade prcing function.The conclusion of this paper has important policy implications for the steady development of RMB trade prcing function against the background of"de-dollarization".Firstly,continue to steadily promote the signing of bilateral currency swap agreements between and among central banks.Secondly,increase the output of RMB denominated commodities and build a RMB prcing network.Finally,work with countries with more internationalized currencies.