Patterns in Invoicing Currency in Global Trade

By Emine Boz, Camila Casas, Georgios Georgiadis, Gita Gopinath, Helena Le Mezo, Arnaud Mehl, Miss Tra Nguyen

July 17, 2020

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Emine Boz, Camila Casas, Georgios Georgiadis, Gita Gopinath, Helena Le Mezo, Arnaud Mehl, and Miss Tra Nguyen. Patterns in Invoicing Currency in Global Trade, (USA: International Monetary Fund, 2020) accessed November 24, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper presents the most comprehensive and up-to-date panel data set of invoicing currencies in global trade. It provides data on the shares of exports and imports invoiced in US dollars, euros, and other currencies for more than 100 countries since 1990. The evidence from these data confirms findings from earlier research regarding the globally dominant role of the US dollar in invoicing – despite the comparatively smaller role of the US in global trade – and the overall stability of invoicing currency patterns. The evidence also points to several novel facts. First, both the US dollar and the euro have been increasingly used for invoicing even as the share of global trade accounted for by the US and the euro area has declined. Second, the euro is used as a vehicle currency in parts of Africa, and some European countries have seen significant shifts toward euro invoicing. Third, as suggested by the dominant currency paradigm, countries invoicing more in US dollars (euros) tend to experience greater US dollar (euro) exchange rate pass-through to their import prices; also, their trade volumes are more sensitive to fluctuations in these exchange rates.

Subject: Currencies, Data collection, Economic and financial statistics, Exchange rate pass-through, Exchange rates, Exports, Foreign exchange, International trade, Money

Keywords: Currencies, Currency data, Data collection, Data set, Dominant currency paradigm, Exchange rate pass-through, Exchange rates, Exports, Global, Invoicing currency of trade, Invoicing currency pattern, Invoicing currency share, Invoicing share, WP

Publication Details

Pages:

38
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/126
Stock No:

WPIEA2020126
ISBN:

9781513550435
ISSN:

1018-5941

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