China’s yuan has become the world’s fifth most widely used payments currency, with the value of cross-border deals settled in it more than doubling in 2014, data from transactions organisation SWIFT showed today.
The data comes as China looks to make the yuan used more internationally in line with its standing as the world’s second-largest economy, while at the same time keeping its value tightly controlled.
The yuan, also known as the renminbi (RMB), overtook the Canadian dollar and the Australian dollar to enter the top five of world payment currencies in November, according to a SWIFT statement.
It has climbed eight spots in fewer than two years, having been in 13th place in January 2013.
The yuan’s share of global payments by value reached a new high of 2.17 per cent in December, SWIFT said, closing in on the Japanese yen’s 2.69 per cent.
Total yuan payments rose 102 per cent last year, the statement added, dwarfing the overall annual rise of 4.4 per cent for all currencies.
Some analysts predict the yuan will one day rival the US dollar in international markets.
“It is a great testimony to the internationalisation of the RMB and confirms its transition from an ’emerging’ to a ‘business as usual’ payment currency,” Wim Raymaekers, head of banking markets at SWIFT, said in the statement.
The US dollar remains the top payments currency with a share of 44.64 per cent last month, followed by the euro (28.3 per cent) and the British pound (7.92 per cent), SWIFT data showed.
China has set up yuan clearing arrangements with 10 countries and regions and signed currency swap agreements with 28 central banks.
The commerce ministry said last week it will only issue figures for inward and outward investment in yuan, dropping the dollar statistic, a move that the agency acknowledged was partly an effort to push the local currency’s greater international role.
Earlier this month, Customs only issued trade values in yuan at its quarterly briefing, with the official dollar amount made available later on its website.