New | Share of Chinese currency slides in global payments
Yuan falls behind Japanese yen in September in Swift system, even as it garners more support for reserve currency status
The yuan came down a notch in the global banking payments last month even as more foreign banks joined the chorus for its inclusion in an elite currency club.
Global yuan payments last month decreased in value by 5.57 per cent, the only currency whose usage dropped. Payment currencies overall grew 7.56 per cent, show Swift data.
The US dollar accounted for the biggest share (43.27 per cent) in global payments, followed by the euro (28.53 per cent), pound (9.02 per cent) and yen (2.88 per cent). Payments through Swift accounted roughly for 15 per cent of the world’s merchandise trade.
The contraction in both share and absolute value owed to a slowdown in yuan-denominated re-invoicing and in import and export volumes and lower sales recorded by local Chinese firms, said Biswajyoti Upadhyay, head of greater China and North Asia, product management, transaction banking, at Standard Chartered.
“Expectation was high back in September that the yuan would further depreciate and the US dollar strengthen. Against such a backdrop, companies were reluctant to re-invoice payments in yuan,” he said.