China’s yuan slipped to the seventh-most actively traded currency in the league tables for global trade finance, transaction service provider SWIFT said. A struggling overseas offshore market in the renminbi has hurt the usage of the Chinese currency in global trade in recent months and the latest ranking is yet another indicator of the bearish sentiment surrounding the currency by global companies.
In a presentation posted on its website dated May 23, the latest ranking for April places the renminbi behind the swiss franc with a global market share of 1.60 percent.
In comparison, the U.S. dollar was at the top of the heap with a 42.1 percent market share followed by the euro at 31.1 percent.
It comes a day after Moody’s Investors Service downgraded China’s credit ratings on Wednesday for the first time in nearly 30 years.
The yuan’s usage by value in traditional trade finance – letters of credit and collections – has been decreasing since 2014 when it peaked to nearly 9 percent of global trade and rose to the second-most active currency in trade finance after the dollar, according to SWIFT.
The yuan lost around 6.5 percent in 2016 and has basically gone sideways and a Reuters poll expects it to gradually drift lower against the dollar to 7.07 against the greenback in a year.