More countries use yuan to settle international payments

PUBLISHED : Thursday, 23 May, 2013, 12:00am
UPDATED : Thursday, 23 May, 2013, 4:44am

More countries are using the yuan to settle payments, a development that underscores the increasing internationalisation of the currency.

Of the 160 countries that settled payments with Hong Kong and the mainland last month, 47 had at least 10 per cent of their transfers made out in the yuan, according to SWIFT, a global member-owned co-operative servicing financial institutions.

The number of countries "crossing the RMB river", or having at least 10 per cent of payments valued in the yuan, grew 9 per cent in the nine months to April this year, SWIFT said in a report yesterday.

"The big increase in countries with substantial RMB volumes is a good indicator that the currency has become more internationalised," said Lisa O'Connor, RMB director at SWIFT.

"This also presents business opportunities for those banks with RMB business intelligence and product capabilities in those countries."

The average yuan payment weighting in all the 160 countries jumped to 6 per cent in April, 2 percentage points higher than in July, SWIFT said.

Italy and Russia are among the major adopters of the yuan. Other places where the currency is increasingly popular for payments include Britain and Singapore, the organisation said.

The yuan was the world's 13th largest payment currency in terms of amount last month. Its share fell to 0.69 per cent in April, from 0.74 per cent the previous month.

To improve the status of the yuan in step with the growing size of the Chinese economy, Beijing launched a pilot scheme in 2009 that allowed companies to settle cross-border trades in yuan and receive tax rebates. It has also encouraged banks to expand overseas.

China UnionPay, a state-backed card issuer and payment-processing company, aims to increase its global market share and serve Chinese consumers making payments overseas.

The firm, 11 years old, has a presence in 135 countries and regions. It is accepted by eight million overseas retailers and has issued 15 million cards abroad.