Chinese Renminbi in the Caribbean: Opportunities for Trade, Aid and Investment

This research paper analyses the potential benefits and risks of the use of the Chinese Renminbi (RMB) in the Caribbean Development Bank’s (CDB) Borrowing Member Countries (BMCs). To this end, the paper will draw on insights from existing examples of the use of RMB in commercial trade between the People’s Republic of China and Suriname, a BMC that leads the Caribbean in RMB use. It will analyse which potentialities could arise in the use of RMB such as, increased trade and foreign direct investment (FDI), as well as currency and liquidity risks that would require mitigating actions. The paper also addresses the issue of the financial intermediation of aid, trade and investment funds vis-avis the provision of alternative financial networks in the form of Chinese corresponding banking relations and clearing houses. We analyse how these developments have presented opportunities to increase BMC access to global financial services.

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