China’s yuan was ranked No. 8 for transactions in the global payments system in December, according to the Society for Worldwide Interbank Financial Telecommunication.
It jumped four places from October and had a 1.12 percent market share, SWIFT said in an e-mailed statement today. Usage of the yuan, known officially as the renminbi, in November and December rose 15 percent while other currencies gained 7 percent, Franck de Praetere, head of payments and trade markets for Asia-Pacific at SWIFT, said in the statement.
China’s policy makers are seeking to boost the currency’s convertibility and global use. The authorities aim to reduce intervention in the market and expand the yuan’s trading band, Caixin online magazine reported Jan. 14, citing Wang Yu, deputy director-general of the central bank’s research bureau. The yuan can now diverge a maximum 1 percent from a daily fixing. “Now that the renminbi has consolidated its position as a globally-used currency, we expect the industry’s attention to shift to discussions on the best architecture for cross-border transactions so the market can reach levels of operational efficiency, risk and liquidity management on par with other globally-traded currencies,” de Praetere said in the statement.
Payments in the yuan remain concentrated in Hong Kong, which has a 74 percent market share, SWIFT said. The yuan appreciated 2.9 percent against the dollar last year, the best performance among the 11 most-traded Asian currencies tracked by Bloomberg.
The yuan, which slipped 0.01 percent today to 6.0522 per dollar as of 11:56 a.m. in Shanghai, will gain 1.4 percent this year to 5.97, according to the median estimate in a Bloomberg survey. The currency accounted for 8.66 percent of letters of credit and collections used in global trade finance in October, second only to the dollar and surpassing the euro’s 6.64 percent share, SWIFT said in December.