China's efforts to internationalise the yuan are bearing fruit, with a surge in yuan payments over the past 21 months, while the Hong Kong dollar's ranking has fallen, according to Swift, which operates a global international network for financial institutions.
A report said yuan payments among banks and securities firms worldwide had grown 17.4 times over the period, compared with an average growth of 1.1 times for other currencies surveyed.
The group measured the use of currencies for payments in its network, which links 10,000 banks and securities firms worldwide, from October 2010 to June this year.
It said the yuan was now the 16th most-used payment currency, up from 35th in October 2010.
The yuan is now ahead of the Mexican peso, New Zealand dollar, Turkish lira and Hungarian forint.
But it still has some way to go to break into the top of the league table, where Swift said the top six currencies - the euro, US dollar, British pound, Japanese yen and Australian and Canadian dollars - remained unchanged over the period.
The Hong Kong dollar, which in 2010 was in seventh place, had dropped to 10th as of June, and has been overtaken by the Swiss franc, Swedish krona and Singapore dollar.
Chan Tze-ching, a senior adviser with the Bank of East Asia, said the Hong Kong dollar's drop might be related to the growth in yuan trade settlement in Hong Kong.
While the yuan is not yet fully convertible, China has moved over the past three years to ease the rules to encourage more international firms to use its currency to settle trade and investments.
'China is determined to encourage more international usage of the yuan. We will see more banks and companies using it to settle trade or for investment,'' Chan said. 'At some point, the yuan is likely to be one of the top 10 currencies in terms of usage and will only lag reserve currencies like the US dollar, the euro and the yen.''
The Russian ruble, which is also a BRIC currency - BRIC refers to Brazil, Russia, India and China - also gained, rising 3.2 times over the period, lifting its ranking to 13th, from 20th.
The number of countries using yuan payments has risen to 91, up from 65 a year earlier, Swift reported. A total of 983 institutions used yuan payments last month, up from 617.
The number of countries using the ruble rose to 69 from 62 , and the number of institutions opting for rubles rose to 1,315 from 1,256.