HONG KONG, March 26 China's yuan fell back behind the Swiss franc to rank as the eighth most-used world payment currency in February, likely due to the seasonal effect of the Chinese New Year, global transaction service organisation SWIFT said on Wednesday.
The Chinese currency saw its market share rise to 1.42 percent in February, the highest on record. Yet, it was 0.03 percentage points lower than the Swiss franc, which it surpassed in January.
Globally, renminbi payments decreased in value by 8.5 percent in February from a year earlier, compared to a 10.7 fall of all currencies during the same period, said SWIFT, who believed the main reason was February being a shorter month.
The week-long Lunar New Year holiday, which fell at the beginning of February this year, usually dampens economic activity as factories and offices close shop for long periods before and after the festivities.
Australia's renminbi payments value in February increased by 248 percent from a year ago, placing Australia at sixth for renminbi payments value (excluding China and Hong Kong), according to SWIFT.
In February, 14.2 percent of payments between Australia and China/Hong Kong were in renminbi, compared with 7.7 percent and 1.9 percent in the same months of 2013 and 2012, respectively.
About 98 percent of these payments in value were institutional, as opposed to payments sent by banks on behalf of their customers, which made up the remaining 2 percent, Bill Doran, Head of Oceania for SWIFT said in a statement.
"This is most likely a reflection of the RMB mainly being used for investments and foreign exchange activities, rather than trade settlement. Given the strong trade relationship between China and Australia, we expect to see direct customer payments in this country grow as well," Doran said.
The Australian Securities Exchange (ASX) and the Bank of China have agreed to provide renminbi settlement services in July this year, making it convenient for Australian companies trading with China to pay and receive renminbi for cross-border transactions. (Reporting by Michelle Chen; Editing by Kim Coghill)