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Currency of Invoicing in Merchandise Trade

Published online by Cambridge University Press:  26 March 2020

S.A.B. Page
S.A.B. Page*
Affiliation:
National Institute of Economic and Social Research
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Abstract

Almost all trade among industrial countries is now invoiced in the currency of one of the trading partners, normally that of the exporter. Use of a ‘third country currency’ (normally the dollar) is important only in trade with developing countries. Except for the decline in sterling's use as an international currency, there is no evidence that exchange rate expectations are a strong influence on traders' choice of currency.

Type
Articles
Information
National Institute Economic Review , Volume 81 , August 1977 , pp. 77 - 81
Copyright
Copyright © 1977 National Institute of Economic and Social Research

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References

(1) References are given on p. 79.

(1) Most countries' data do not distinguish between trade in dollars with the United States and other uses of the dollar; subtracting total trade with the United States gives a minimum estimate of ‘third country’ use.

(2) The proportion of under 10 per cent found by Wood and Carse for sterling invoicing of United Kingdom imports seems surprisingly low compared with the other countries in table 1, and more like that for Japan or the developing countries in table 2. The share of Britain's imports from France invoiced in sterling is higher than the own currency share of Sweden and slightly below those of Belgium and the Netherlands. Its high share of primary imports should lower its aggregate share relative to these countries, but not by over 50 per cent. Wood and Carse's estimate for exports, however, was extremely close to that found in the survey by the Department of Trade.