Chinese Yuan Surpasses Euro as Most Used Currency Globally
The Chinese yuan has now surpassed the euro to be one of the world’s second largest widely used currencies in the global trade finance based on the data that was released by the Society for the Worldwide Interbank Financial Telecommunication.
Financial analysts are saying that China’s opening up of their financial sector along with the broader internationalization of the yuan increased the use of the currency. The Chinese yuan was able to capture 8.66 percent share of the letter of credits and collection of the month of October as the euro was only able to capture 6.64 percent. Show that the presence of the Chinese yuan in the global trade has grown significantly in the past couple of years.
In January of 2012 the yuan’s share of the global trade was at 1.89 percent compared to the 7.87 percent of the euro. Mainland China, Singapore, Hong Kong, Australia and Germany were some of the top country that was using the Chinese yuan in the finance trade.
The renminbi is significantly one of the top currencies in trade finance globally and in Asia as Hong Kong is one of the largest yuan deposits pool found outside of mainland China with a total of 782 billion yuan for the month of October. The central bank of China further announced that the country will be directly trading currency between the yuan and the British pound and the Singapore dollar as well.
Payment value for the yuan is slowly rising and daily transactions have jumped from $34 billion in 2010 to $120 billion in April of 2013. The country also concluded a currency swap deal with the European Central Bank which drove the deal short term of the relaxation of personal yuan conversions.