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The paper examines the usage of the Renminbi (RMB) as an international payment currency. Globally, the use of RMB remains small, accounting for 2 percent of total cross-border transactions. Using country-level transaction data from Swift** for 2010–21, we find significant regional variations in the use of RMB for cross-border payments. While RMB is little used in some regions, it has gained traction in others, and these cross-country differences have widened over the years. Such differences can be partly explained by an economy’s geographic distance, political distance, and trade linkages with China. However, it also reflects the impact of policy measures by the People’s Bank of China, including establishing bilateral swap lines and offshore clearing banks. Both policy measures helped to address offshore RMB liquidity shortages given China’s overall capital account restrictions, with the offshore clearing banks having a quantitatively larger impact. Our analysis contributes to a better understanding of the growing importance of RMB within the international monetary system.

Macroeconomics --- Economics: General --- Money and Monetary Policy --- Banks and Banking --- Exports and Imports --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- International Monetary Arrangements and Institutions --- International Lending and Debt Problems --- Current Account Adjustment --- Short-term Capital Movements --- Economic & financial crises & disasters --- Economics of specific sectors --- Monetary economics --- Banking --- International economics --- Offshore financial centers --- Financial services --- Currencies --- Money --- Capital account --- Balance of payments --- Reserve currencies --- International monetary system --- Currency crises --- Informal sector --- Economics --- International finance --- China, People's Republic of

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Failures in the crypto space—including the fall of Terra USD and the FTX debacle—have sparked calls for strengthening countries’ policy frameworks for crypto assets, including by enhanced regulation and supervision. How have these heightened concerns about crypto assets been picked up in systemic risk assessment, and what can be done going forward? In this paper, we introduce a conceptual macrofinancial framework to understand and track systemic risks stemming from crypto assets. Specifically, we propose a country-level Crypto-Risk Assessment Matrix (C-RAM) to summarize the main vulnerabilities, useful indicators, potential triggers and potential policy responses related to the crypto sector. We also discuss how experts and officials can weave in specific vulnerabilities stemming from crypto asset activity into their assessment of systemic risk, and how they can provide policy advice and take action to help contain systemic risks when needed.

Banks and Banking --- Blockchain and DLT --- Blockchains --- Capital and Ownership Structure --- Credit risk --- Currencies --- Currency crises --- Databases --- Distributed ledgers --- Economic & financial crises & disasters --- Economic sectors --- Economics of specific sectors --- Economics --- Economics: General --- Finance --- Finance: General --- Financial Institutions and Services: General --- Financial Institutions and Services: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Financial regulation and supervision --- Financial Risk and Risk Management --- Financial risk management --- Financial sector --- Financial services industry --- Financial services law & regulation --- Financing Policy --- General Financial Markets: Government Policy and Regulation --- Goodwill --- Government and the Monetary System --- Industries: Financial Services --- Informal sector --- Macroeconomics --- Monetary economics --- Monetary Systems --- Money and Monetary Policy --- Money --- Payment Systems --- Regimes --- Standards --- Technological innovations --- Technology --- Value of Firms --- Virtual currencies

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While the global usage of currencies other than the U.S. dollar and the euro for cross-border payments remains limited, rapid technological (e.g. digital money) or geopolitical changes could accelerate a regime shift into a multipolar or more fragmented international monetary system. Using the rich Swift database of cross-border payments, we empirically estimate the importance of legal tender status, geopolitical distance, and other variables vis-à-vis the large inertia effects for currency usage, and perform several forecasting simulations to better understand the role of these variables in shaping the future payments landscape. While our results suggest a substantially more fragmented international monetary system would be unlikely in the short and medium term, the impact of new technologies remains highly uncertain, and much more rapid geopolitical developments than expected could accelerate the transformation of the international monetary system towards multipolarity.

China, People's Republic of --- Macroeconomics --- Economics: General --- Money and Monetary Policy --- Finance: General --- Industries: Financial Services --- Exports and Imports --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- International Monetary Arrangements and Institutions --- Financial Markets and the Macroeconomy --- Current Account Adjustment --- Short-term Capital Movements --- Economic & financial crises & disasters --- Economics of specific sectors --- Monetary economics --- Finance --- Distributed ledgers --- Currencies --- Money --- International monetary system --- Financial sector development --- Financial markets --- Digital currencies --- Technology --- Portfolio investment --- Balance of payments --- Currency crises --- Informal sector --- Economics --- International finance --- Financial services industry --- Technological innovations --- Portfolio management

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We propose a simple macroeconomic model with input-output sectoral linkages based on Acemoglu et al. (2016) to quantify how changes in aggregate demand due to additional income from household’s remittances propagates through the network of input-output linkages in Sub-Saharan African countries. We first propose two network centrality measures to assess the role of some sectors as key input providers in the economy. Then, we use these measures to quantify the effect of sectoral linkages on sectoral and total output following an increase in remittances inflows. Our empirical results suggest that the effects of remittances on recipient economies increase with the degree of linkages across sectors, which is especially prominent in the case of the financial intermediation sector. Our paper contributes to the emerging macroeconomic literature on the propagation of shocks across sectors and the implications for the whole economy.

Exports and Imports --- Labor --- Macroeconomics --- Remittances --- Input-Output Models --- One, Two, and Multisector Growth Models --- Network Formation and Analysis: Theory --- Macroeconomics: Production --- Macroeconomics: Consumption --- Saving --- Wealth --- Demand and Supply of Labor: General --- Aggregate Factor Income Distribution --- International economics --- Labour --- income economics --- Production growth --- Consumption --- Labor supply --- Income --- Balance of payments --- Production --- National accounts --- International finance --- Economic theory --- Economics --- Labor market --- Nigeria --- Income economics

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In March 2018, representatives of member countries of the African Union signed the African Continental Free Trade Area (AfCFTA) agreement. This agreement provides a framework for trade liberalization in goods and services and is expected to eventually cover all African countries. Using a multi-country, multi-sector general equilibrium model based on Costinot and Rodriguez-Clare (2014), we estimate the welfare effects of the AfCFTA for 45 countries in Africa. Three different model specifications—comprising both perfect competition and monopolistic competition—are used. Simulations include full elimination of import tariffs and partial but substantial reduction in non-tariff barriers (NTBs). Results reveal significant potential welfare gains from trade liberalization in Africa. As intra-regional import tariffs in the continent are already low, the bulk of these gains come from lowering NTBs. Overall gains for the continent are broadly similar under the three model specifications used, with considerable variation of potential welfare gains across countries in all model structures.

Commercial policy. --- Foreign trade policy --- International trade --- International trade policy --- Trade policy --- Economic policy --- International economic relations --- Government policy --- Exports and Imports --- Macroeconomics --- Taxation --- Neoclassical Models of Trade --- Models of Trade with Imperfect Competition and Scale Economies --- Trade Policy --- International Trade Organizations --- Economic Integration --- Trade: Forecasting and Simulation --- Trade: General --- Empirical Studies of Trade --- Aggregate Factor Income Distribution --- International economics --- Public finance & taxation --- Tariffs --- Trade barriers --- Imports --- Trade balance --- Income --- Taxes --- National accounts --- Tariff --- Commercial policy --- Balance of trade --- South Africa