Description:
This paper mainly studies the role played by offshore Renminbi (CNH) in the process of internationalization. After 2010, the spillover effect of CNY has increased significantly indicated that foreign exchange rate risk contagion among the countries which were reflected in the dynamic change of the spillover index as well as some sudden crises that happened, especially. That is, CNH is helpful to the internationalization of the RMB. Although RMB has clearly established itself as an important currency and has a significant spillover effect on major currencies, it is still highly regulated, and the exchange rate price is still determined by the People’s Bank of China and is not subject to outside influence. It could help shed light on the changing dynamics of the global financial system and the increasing role of China and the CNY within it. It could also provide insights for businesses, investors, and policymakers who need to understand how fluctuations in the exchange rate of CNY could affect their operations, investments, and policies