China’s yuan has boosted its place in currency rankings tracking usage for global payments, according to the Society for Worldwide Financial Telecommunications.
The currency’s market share rose from 2.09 per cent to 2.34, according to Swift, which is based in La Hulpe, Belgium. The yuan ranked fifth for the first time in December and trails the dollar, euro, British pound and Japanese yen.
The share of cross-border payments using Chinese currency across Asia rose from 24 per cent to 33 per cent in 12 months ending July this year, SWIFT said in its latest tracker of the Chinese yuan.
The rising share of yuan-denominated transactions is fueled by growing adoption of the Chinese currency across several Asian economies thanks to clearing centers established with China’s major trade partners in the region.
“The appointment of clearing centers in Taipei, Singapore, Seoul and more recently Sydney and Kuala Lumpur clearly promotes the use of the currency for global trade and finance across the region,” said Michael Moon, SWIFT’s head of payments for Asia Pacific.
Payments between South Korea and China jumped 173 per cent from a year ago, followed by a 45 per cent increase from Taiwan and 19 percent from Singapore.
The US dollar still dominates India’s payment flows with the Chinese mainland and Hong Kong, SWIFT data shows.
China is pushing for the yuan to join the other four currencies in obtaining reserve status at the International Monetary Fund and the latest usage data will help support its case before a review later this year.
India’s Chief Economic Advisor on Monday said New Delhi must support China’s bid to include its currency in the IMF’s basket of reserve currencies.
“India must support the entry of the Renminbi into the IMF’s basket of SDRs. As the Chinese currency becomes more and more international, China will have to open up its economy which is good for the world, good for China,” India’s Chief Economic Advisor Arvind Subramaniam argued in a conference in the Indian capital.
Last month, the yuan weakened by more than four per cent against the US dollar at one point.
SWIFT said so far it is still difficult to ascertain how the yuan’s revaluation will impact its adoption in cross-border payments.
TBP and Agencies