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RMB displaces yen as fourth most used currency for global payments
THE Chinese RMB (renminbi) has overtaken the Japanese yen as the fourth most-used currency for global payments, according to latest statistics by SWIFT, shrugging off a surprise revaluation to rise to its highest ranking in 2015.
The report which is deemed a boost to the RMB's "prerogative for reserve status" was pointed out by a report on the Singapore Exchange's investor education portal My Gateway.
It also comes as the International Monetary Fund (IMF) prepares to conduct a twice-a-decade review of its Special Drawing Rights (SDR) basket, which comprises the US dollar, euro, yen and the British pound.
China has been actively lobbying for the yuan's inclusion in the SDR basket, which could generate as much as US$1 trillion of inflows into the currency, according to Standard Chartered plc.
The RMB has regained one per cent against the US dollar since the surprise revaluation in August.
The sharp rise in volatility for both onshore and offshore RMB markets has spurred demand for effective currency hedging tools to protect against downside risk, said SGX.
Trading volume in the SGX's USD/CNH futures has exceeded US$167 billion in notional value traded since inception 12 months ago and has surged over four fold to 34,951 contracts (some US$3.5 billion in notional value) traded for the month of September.
"This growth has propelled SGX's USD/CNH futures to the forefront as the most liquid offshore RMB futures product traded across various global futures exchanges," said SGX.