China’s yuan has overtaken the euro to become the second most popular currency in trade finance, it has been revealed.
The Belgium-based global transaction services platform SWIFT said the market share of yuan used in trade finance (something also termed Letters of Credit and Collection) increased to 8.66% in October 2013 – improving from its 1.89% January 2012 position.
The euro currently stands at 6.64%. In January 2012, it was 7.87%.
Also known as the renminbi, the yuan now ranks second behind America’s dollar – which remains the world’s strongest currency with a market share of 81.08% in October (previously 84.96% in January 2012).
The top five users of China’s currency for trade finance were Australia, China, Germany, Hong Kong and Singapore, SWIFT said in its statement.
“The RMB is clearly a top currency for trade finance globally and even more so in Asia,” SWIFT’s Asia Pacific Head of Payments noted.
On the world stage, the yuan remained in 12th place in terms of global payments.
Its 0.84% share in October was slightly decreased from September total of 0.86%.
Renmibi payments rose in value by 1.5%, while overall growth for payments currencies remained buoyant at 4.6%.
Big plans, and big payments
As the world’s second-biggest economy, China is rapidly developing its financial reform to endorse and fund its currency worldwide.
China wants to increase the yuan’s global pull and lessen its dependence on the American dollar, and international companies and exporters seek to use the renminbi to increase their attractive to the lucrative market in China.
Since it first started in 2009, yuan trade settlement has expanded rapidly, and the percentage of the country’s total trade completed in yuan has grown from 12% in 2012 to almost 20%.