Amid increasingly close global economic and trade ties, the cross-border spillover effects of China’s monetary policy have attracted growing attention. As currency internationalization is inherently linked to these spillover effects, the analysis of such effects should be set against the backdrop of the dominant international role of the US dollar and the rapid advancement of RMB internationalization. This raises two core questions: What are the cross-border spillover effects of China’s monetary policy? Does RMB internationalization affect these spillover effects?

Based on measurements of the RMB’s global distribution as an anchor currency, this paper uses a sample of 140 economies from 2000 to 2022 to empirically investigate the cross-border spillover effects and transmission mechanisms of China’s monetary policy, along with the moderating role of RMB internationalization. The findings are as follows: First, China’s monetary policy causes opposite movements in output growth and inflation in other economies, acting as a supply-side shock; and price-based monetary shocks have stronger effects than quantity-based shocks. Second, China’s monetary policy affects other economies mainly through the trade channel—via bilateral trade volumes on output and import prices on inflation—while the financial channel is insignificant. Third, adopting the RMB as an exchange rate anchor weakens exchange rate pass-through and domestic absorption effects on bilateral trade, stabilizing output; meanwhile, stable imports from China strengthen inflation spillovers. Fourth, the spillover effects and the RMB anchor’s moderating role are more significant in emerging and developing economies, those with relatively strict capital controls, and those with intermediate or fixed exchange rate regimes.

This paper contributes to the literature in two ways: First, it addresses the theoretically and practically important issue of how RMB internationalization affects the cross-border spillover effects of China’s monetary policy, and deeply analyzes the moderating role of the RMB’s anchor currency status, thus enriching the existing research. Second, the findings carry important policy implications for further promoting RMB internationalization and strengthening international monetary policy coordination.