Global Stores of Value and the International Role of the Renminbi

37 Pages Posted: 28 Oct 2014

See all articles by Kartik Anand

Kartik Anand

Deutsche Bundesbank

Prasanna Gai

University of Auckland Business School; Australian National University (ANU); Bank of England

Date Written: August 27, 2014


We explore the conditions under which a financial asset emerges as a global store of value and can co-exist with a pre-existing (incumbent) store of value. In our model the acceptability of an asset as a global store is driven by the issuing region’s financial development, growth rate, degree of capital liberalization, and by strategic complementarities across investors vying to purchase and sell financial assets. Our model contributes to the debate on the internationalization of the renminbi, supporting the view that deep financial reforms should precede capital account liberalization to sustain the renminbi’s international status over the medium term.

Keywords: Safe Assets, International Monetary System, International Currencies

JEL Classification: F02, F30, F33, G15

Suggested Citation

Anand, Kartik and Gai, Prasanna, Global Stores of Value and the International Role of the Renminbi (August 27, 2014). CIFR Paper No. 043, Available at SSRN: or

Kartik Anand

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431


Prasanna Gai (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom
+020 7601 3583 (Phone)

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