Core Viewpoint - The article discusses the slow progress of RMB internationalization compared to China's growing global economic status, exploring the feasibility and implications of accelerating this process from the perspective of "liquidity premium" [1]. Group 1: Current State of RMB Internationalization - The current level of RMB internationalization is not commensurate with China's economic scale, with RMB's share in foreign exchange trading, international payments, trade financing, and reserve currency significantly lower than its GDP share [4][5]. - RMB's share in global payments is estimated to be around 8%, with a significant portion of international payments occurring in Hong Kong [4][11]. - Historical data shows that accelerating RMB internationalization does not necessarily lead to depreciation; for instance, after the 2005 exchange rate reform, the RMB appreciated against the USD for nine consecutive years [4][27]. Group 2: Factors Influencing RMB Internationalization - The RMB market exchange rate is undervalued compared to its purchasing power parity (PPP) rate, indicating a high liquidity premium due to insufficient global liquidity [4][28]. - The current excessive liquidity of the USD, which constitutes 48.46% of global payment currency and 57.8% of reserve currency, creates a situation where the USD is overvalued [47][48]. - The external environment, including the declining USD index and rising US debt pressure, presents a favorable opportunity for RMB internationalization [40][41]. Group 3: Recommendations for Accelerating RMB Internationalization - Suggestions include further opening the capital account, providing exchange convenience for enterprises and residents, and studying the legislation of RMB stablecoins to enhance RMB's international payment and settlement roles [56][62]. - The article emphasizes the need for the central bank to gradually reduce its holdings of USD assets and increase gold reserves, which would enhance RMB's credibility [63][67]. Group 4: Economic Implications of RMB Internationalization - Accelerating RMB internationalization is expected to facilitate China's economic transformation, allowing for a potential reduction in GDP growth targets as the RMB appreciates [68][69]. - The internationalization of the RMB can help Chinese enterprises grow stronger by attracting foreign investment into the A-share market and supporting overseas mergers and acquisitions [10][73].

Global Monetary Policy Tracking - The core viewpoint indicates that major central banks are maintaining their current interest rates amidst increasing uncertainty regarding tariffs, with only the European Central Bank (ECB) implementing a rate cut [2][14] - In the observation period from February 8 to March 23, 2025, among 26 major economies, 7 experienced rate cuts and 1 an increase, while the US, Japan, and the UK kept rates unchanged [2][19] - The Federal Reserve maintained its target federal funds rate at 4.25%-4.50%, reflecting a cautious stance due to heightened economic uncertainty [13][19] Global Rate Cut Expectations - The Federal Reserve's rate cut expectations have fluctuated significantly, with market predictions for a potential cut in May reaching around 50% due to economic indicators falling short of expectations [3][19] - Following the release of better-than-expected employment and inflation data in mid-March, the likelihood of a rate cut in May dropped to approximately 20% [3][19] - The European and UK rate cut expectations remain relatively stable, with a 60% probability of a cut in the Eurozone by April 2025 [19] China's Interest Rate Position - China's real interest rates rebounded from 2.2% in January to a range of 3%-3.1% in February-March 2025, positioning it among the highest globally [4][28] - The increase in real interest rates is attributed to the seasonal effects of inflation dissipating post-Spring Festival [4][28] Global Liquidity Tracking - The Federal Reserve decided to slow down its balance sheet reduction, primarily due to disturbances in the Treasury General Account (TGA) caused by the debt ceiling issue [5][33] - As of March 19, 2025, the Fed's reserve balance expanded by approximately $68.3 billion, despite a total balance sheet reduction of $2.04 trillion [5][34] - The liquidity in the repurchase market has returned to a more relaxed state, with the SOFR-EFFR spread turning negative, indicating improved liquidity conditions [8][41] Global Financial Market Liquidity - The liquidity in the US Treasury market has shown increased volatility, but the market remains stable without significant liquidity risks [10][47] - The Libor-OIS spread has widened, indicating a slight increase in liquidity premium, although it has not reached alarming levels [11][50] - Credit risk premiums have seen a slight increase since March 2025, influenced by rising geopolitical uncertainties and tariff concerns [12][53]