Finance and Credit

Modern world currencies: The role in the formal sector

Vol. 24, Iss. 1, JANUARY 2018

Received: 13 November 2017

Received in revised form: 27 November 2017

Accepted: 11 December 2017

Available online: 29 January 2018


JEL Classification: F31, F33

Pages: 79–94

Kudryashova I.V. Volgograd State University, Volgograd, Russian Federation

ORCID id: 0000-0001-9911-7708

Importance The article analyzes the issues of actual use of the US dollar, euro, pound sterling, Japanese yen and Chinese yuan by non-residents.
Objectives The paper aims to compare the demand forming factors of the monetary authorities of countries and regions for world currencies with the volume of use in the public sector. Also, the paper aims to determine the diversification prospects of the currency transaction structure of central banks.
Methods The research uses the historical method, synthesis, comparative analysis, tabular and graphic methods, absolute and relative indices technique.
Results Today's determinants of international demand for world currencies provide the monetary authorities of individual countries and regions with the possibility of wider use of the euro and yuan in their operations. However, the US dollar remains the only currency fulfilling all the functions of the world money.
Conclusions The increase in the euro and yuan transactions in the public sector is hampered by the relatively low liquidity of the financial market of the euro zone, the lack of full convertibility of the Chinese national currency. In the event of overcoming these difficulties, diversification of the currency structure of central bank operations is possible in the long-term, based on changes in external network effects.

Keywords: world currency, official sector, currency intervention, monetary reserve, currency rate


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