BackYuan becomes fifth most used currency in the world
Report says 2.06% of the world's inbound and outbound trade is settled in the Chinese currency as of January 2015
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Mumbai: The Chinese renminbi has become the fifth most used currency for trade worldwide ahead of the Canadian and Australian dollars and traditional reserve currencies like the Swiss franc.
In a report on Wednesday, global financial transaction messaging platform SWIFT said 2.06% of the world’s inbound and outbound trade is settled in the Chinese currency as of January 2015.
SWIFT is a member-owned cooperative with 10,500 financial institutions in its fold.
The renminbi is now No. 5, behind the dollar, euro, British pound and the Japanese yen, at No. 5 position up from No. 7 in January 2014.
In terms of documentary credits, which includes letters of credit in international currency, the Chinese currency is number two globally and has been successful in cornering some share from the US dollar, data from SWIFT shows.
The renminbi has 9.43% of the global documentary credit market, up from the 7.32% market share it had in January 2013, whereas the dollar’s share in the global documentary credit market has dropped to 79.73% in January 2015 from 82.69% in January 2013.
“In January 2015, China, Singapore and Hong Kong remain the top three countries using RMB as currency for documentary credits, exchanging nearly 95% of all RMB documentary credit transactions worldwide in value. They were followed by Macau and Taiwan with 0.88% and 0.86 %, respectively," SWIFT said.
André Casterman, global head, corporate and supply chain markets at SWIFT, said the increased used of the renminbi is due to China’s rise as one of the world’s largest trading nation.
“China’s position as one of the main exporting and importing countries in the world is supporting the increasing use of the Chinese currency. However, many of these renminbi transactions are still mostly driven by China and Hong Kong, even though the renminbi is nearly 10% of traditional trade finance flows globally in terms of value," Casterman was cited as saying the report.
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