2024-08-24 08:32:16
The yuan continues to perform strongly in global payments and is now the world’s fourth largest currency, behind the US dollar, the euro and sterling and ahead of the Japanese yen.
The share of the Chinese yuan in global payments reached record level in Julya fact that constitutes milestone in Beijing’s efforts to counter the hegemony of the US dollar and increase eits influence on the international monetary system.
Fourth place in the ranking of payment currencies
Last month, the yuan retained its fourth place in the ranking of payment currencies, with its share of global transactions rising to 4.74% from 4.61% in June.
The increase was observed in its figures Society for Worldwide Interbank Financial Telecommunication (Swift)the world’s largest interbank messaging service.
It was the ninth consecutive month in which the Chinese currency has remained above 4%.
Swift payment data is an important indicator of the relative state of international currencies.
The data showed that the value of yuan-settled payments up 13.4% since June, beating the 10.3% gain seen across all currencies.
Second largest economy
The world’s second-largest economy first encouraged the use of its currency in international trade settlements in 2009 in response to the global financial crisis.
Meanwhile, the dollar-yuan exchange rate saw some appreciation of the Chinese currency, consistent with a period of international dollar weakness.
The role of Russia
The use of the yuan has increased since Russia was kicked out of the US dollar system following its invasion of Ukraine in February 2022.
Most of the US$240 billion exchanged between China and Russia last year was settled in yuan or rubles.
Experts continued to promote the yuan as an alternative currency in international trade, while the perception that the US dollar was being used against Russia caused jitters in emerging markets.
Despite devaluation pressures, the yuan’s internationalization has advanced this year and its overseas use is increasing,” said Ding Shuang, chief economist for Greater China at Standard Chartered Bank.
Standard Chartered’s Renminbi Globalization Index, which also tracks the international use of the yuan, continued to grow this year after a sharp 33% increase in 2023according to Swift’s data.
The yuan surpassed the Japanese yen as the fourth most active currency in global payments in November 2023, after the US dollar, the euro and sterling.
In July, the US dollar accounted for 47.8% of global payments, followed by euro with 22.5% and the sterling at 7%, according to Swift’s data.