China’s yuan has overtaken the Japanese yen and moved into fourth place among the world’s payments currencies, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) said yesterday.
The yuan held a 2.79 percent share in world payments based on value in August, the organization said in a statement, besting the yen’s 2.76 percent. The yen’s position eroded to fifth place.
MOVEMENT
Over the past three years the yuan has jumped past seven currencies, SWIFT said.
The Chinese currency ranked 12th with a share of just 0.84 percent in August 2012.
“The currency has also further established itself as the dominant currency for trade finance behind” the dollar, SWIFT said.
The US greenback in August ranked as the top payments currency with a 44.82 percent share, SWIFT said, followed by the euro at 27.20 percent and the British pound at 8.45 percent.
SDR REVIEW
The SWIFT statement comes as the IMF prepares to conduct a twice-a-decade review of its Special Drawing Rights (SDR) basket, which currently comprises the US dollar, euro, yen and the pound.
“The data are positive for the probability of the yuan getting into the SDR basket,” said Nathan Chow (周洪禮), an economist at DBS Group Holdings Ltd in Hong Kong who predicted in January that the currency would surpass the yen in global usage this year.
“It shows that the so-called devaluation in August, which wasn’t massive in value, hasn’t driven people away from using the yuan,” he said.
Some analysts predict the unit will one day rival the US dollar, which is currently the world’s key reserve currency.
Additional reporting by Bloomberg
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