Recently published survey data collected by the RBA show that the value of RMB deposits held with Australianresident banks rose strongly over 2015 and has been broadly unchanged over the past year, at around RMB30–40 billion.3 Consistent with this, annual data from the Australian Bureau of Statistics show that the share of Australia’s trade with China invoiced in RMB has continued to rise in recent years.
If inflationary pressures do not subside, there is a risk that not only the U.S. but also the global economy and financial markets may be adversely affected, for instance, through the reaction of long-term interest rates and foreign exchange rates to this situation. In China, there is an upside risk of the economy growing faster than expected, particularly fixed asset investments and exports.