RESEARCH ARTICLE
RMB Internationalization and Energy Prices: Evidence for Co-integration, Causality and Interaction Relationship

Energy pricing in the international energy market is the key point for RMB internationalization, which can make the process further developed.

Therefore it is of practical significance to study their co-integration relationship and causality, and though the impulse response to analyze their dynamic interaction relationship.

We take the Johansen co-integration and VAR model to explore the interaction between them.

Empirical results show that, firstly there is a long-term equilibrium between RMB internationalization and energy prices, and the change of short-term energy prices have a positive impact on the RMB internationalization index. Secondly, WTI oil price, domestic oil price and domestic coal price linearly Granger cause the RMB internationalization, but not vice versa. While RMB internationalization is only the Granger cause of the international coal price. Finally, the impulse response analysis shows that changes of energy prices play positive roles in promoting the internationalization of RMB.