China yuan overtakes Swiss franc in payments currency ranking

Posted at 02/28/14 2:18 PM

SHANGHAI - China's yuan has overtaken the Swiss franc to become the seventh most-used currency for payments worldwide, a global transaction services organisation said, as Beijing seeks to further internationalise the unit.

The yuan still lags behind the US dollar -- which had a 38.75 percent share in worldwide payments last month -- as well as the euro, British pound, Japanese yen, Canadian dollar and Australian dollar, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) said.

But the Chinese currency, also known as the renminbi (RMB), is ahead of the Swiss franc -- traditionally seen as a safe haven for investors -- the Hong Kong dollar and Thai baht which rounded out the top 10, it said in a statement Thursday.

"Looking at the first month of 2014, which was the highest payments value recorded for RMB so far, it is clear that the RMB is on its way to remaining a top 10 currency for global payments," Asia-Pacific director of payments markets for SWIFT, Michael Moon, was quoted as saying.

The market share of the yuan was 1.39 percent in January, putting it in the top 10 most-used currencies in global payments for the third consecutive month, SWIFT said. It moved up from eighth place in December.

Hong Kong, Britain, Singapore, Taiwan and the United States were the top five offshore markets using yuan for payments, it said.

"Hong Kong continues its role as the leading RMB hub," Moon said. "These new offshore markets play a significant role in maintaining the RMB's position as a 'business as usual' world payments currency."

Britain's financial minister, George Osborne, said earlier this month that his country was holding talks with China to designate a clearing bank for the yuan as it tries to grow London's role for trading the currency.

Nearly two-thirds of yuan payments outside of China and Hong Kong, a special administrative region of China, take place in London, he said.

China's yuan is not freely convertible, but the government is gradually moving towards full convertibility so that the unit might one day rival the US dollar.

Earlier this month, Chinese authorities relaxed restrictions on cross-border yuan payments for trade on a trial basis in its new free-trade zone in Shanghai.

SWIFT said in December that China's yuan had overtaken the euro to become the second most-used currency in international trade finance.

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