China's currency surges to No.4 spot in global payments in August, overtaking Japanese yen
China’s currency snatched the world’s No. 4 spot in global payment value in August from Japan, financial infrastructure organisation SWIFT said on Tuesday in its latest gauge of payment flows.
The yuan had a 2.79 per cent share of world payment value in August, up from just 0.84 per cent three years earlier, or No. 12 globally. The yen’s share of the market was 2.76 per cent in August, trailing the yuan for the first time ever.
The yuan’s No. 4 ranking was still a distant one, however. The US dollar takes 44.82 per cent of the market, the euro 27.2 per cent and the British pound 8.46 per cent, according to SWIFT data.
Between November and December last year, China’s currency leapfrogged the Canadian and Australian dollars to become the world’s fifth most-used payments currency by value.
The rapid rise of the yuan over the past year comes against a backdrop of slow global growth and a declining market for payments.
While yuan payments increased in value by 9.13 per cent from last year, the value of total global payments tracked by SWIFT decreased by 8.3 per cent.
August also marked the first time that more than 1 million transactions had been conducted in yuan, 50 per cent growth on the same month last year.
As China launches its own global payments system for yuan transactions this week, hope are high that the currency will help drive regional trade during a period of prolonged economic sluggishness.
This year the yuan has also become the No. 1 currency for inter-regional payments with China and Hong Kong, something that insiders say has helped bolster growth in Asia.
“The wide use of [yuan] within the Asia Pacific region has not only established closer trade relations between the Asia Pacific region and China but also helped to overcome the economy’s slowdown and repair the harm to the global monetary system caused by the financial crisis,” Jian Ying, a senior economist in the yuan business division of Bank of China (Hong Kong), said in the SWIFT report.
