Yuan back to fifth most-used world payment currency: Swift

The yuan's market share rose to 1.9 per cent last month from 1.72 per cent in June. While the overall yuan payments declined by 0.68 per cent from June, payments in all currencies fell by 10.08 per cent, Swift said.
The yuan's market share rose to 1.9 per cent last month from 1.72 per cent in June. While the overall yuan payments declined by 0.68 per cent from June, payments in all currencies fell by 10.08 per cent, Swift said.PHOTO: REUTERS

HONG KONG • China's yuan bounced back to be the fifth most-active currency for global payments last month, thanks to a big fall in payments in other currencies, global transaction service provider Swift said yesterday.

The yuan's market share increased to 1.9 per cent last month from 1.72 per cent in June. While the overall yuan payments declined by 0.68 per cent from June, payments in all currencies fell by 10.08 per cent, Swift said.

China's "redback" follows fifth behind the US dollar, the euro, sterling and the Japanese yen.

The Chinese currency fell to sixth place in April as volatile foreign exchange rates and China's sluggish economy reduce foreign investors' appetite for yuan assets.

Swift data also showed that yuan payments in South Africa increased by 65 per cent over the last 12 months and by 112 per cent in the last two years.

Nearly 40 per cent of yuan payments by South African institutions were offshore payments exchanged with countries other than China/Hong Kong, compared to 16 per cent a year earlier.

"The establishment of a yuan clearing centre in South Africa in July 2015, as well as Singapore's increased use of the yuan for payments with South Africa, have been a catalyst for yuan growth in the region," said Swift head of banking Harry Newman, .

China and representatives from 50 African countries signed a Memorandum of Understanding on the Promotion of China-Africa Cooperation last December.

It is expected to increase commercial exchanges between China and the African continent and to boost yuan volumes in the future.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 25, 2016, with the headline 'Yuan back to fifth most-used world payment currency: Swift'. Print Edition | Subscribe