(Bloomberg) — The Chinese yuan overtook the yen as the currency with the fourth-largest share in international payments in November for the first time since early 2022, according to transaction data compiled by global financial messaging service Swift.
Trades involving yuan, as a share of all currencies, rose to 4.6% last month from 3.6% in October. It was the most on record for the yuan and topped the yen’s 3.4%. The yuan last held the fourth spot in the rankings in January 2022. The US dollar maintained the helm in November with 47%, followed by the euro and pound, with 23% and 7.15%, respectively.
Swift, or the Society for Worldwide Interbank Financial Telecommunication, is used by large global banks to communicate with each other and manage interbank currency deals. The consortium began compiling the data in 2010, but the figures since July reflect a technical upgrade to how Swift tracks the data based on recently revised trade reporting standards.
According to Swift, 80% of offshore yuan transactions (excluding China) traveled through Hong Kong. Other major offshore FX centers for the yuan included the UK, Singapore and the US. The Chinese currency’s share of trade finance-related transactions, meanwhile, was 5.7% in November, well below the dollar’s but above the euro’s.
While Swift’s data doesn’t encompass the entire global currency market, the report offers a window into the changing nature of global foreign-exchange flows. While the greenback has maintained its dominant role as a global reserve currency since Swift began tracking payments, usage of the yuan has steadily risen from less than 0.1% in 2010.
–With assistance from Alex Tanzi.
©2023 Bloomberg L.P.
