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China jumps to 4th most-used world payment currency: Swift
[HONG KONG] China's yuan became the fourth most-used world payment currency in August, overtaking the Japanese Yen, global transaction services organisation SWIFT said on Tuesday.
The yuan has surpassed seven currencies in the past three years as a payment currency and is now only after the US dollar, the euro and the sterling.
Overall, global yuan payments increased in value by 9.13 per cent in August, while payments across all currencies decreased by 8.3 per cent, according to the organisation.
The yuan reached a record high market share of 2.79 per cent in global payments for the month, compared to 1.39 per cent in January 2014.
More than 100 countries used the yuan for payments in August, of which over 90 per cent of flows were concentrated in 10 countries. Singapore processed 24.4 per cent followed by the United Kingdom with 21.6 per cent.
More than 1,700 financial institutions made worldwide payments in the yuan, up 14 per cent from a year earlier. About 600 of these institutions used the yuan for payments without a leg with China or Hong Kong.
In the trade finance sector, the yuan has a one per cent share in the global issuance of letters of credit by value, strengthening its position as the second most used currency for this purpose.
Foreign exchange transactions in the yuan by value also increased by 20 per cent in August from a month earlier, probably due to the devaluation of the yuan by the People's Bank of China, SWIFT said.
More than 50 percent of the yuan FX trading outside China and Hong Kong is done with the UK, followed by the US, Singapore and France.