* Chinese yuan 9th most-actively traded currency
* Daily turnover at $120 bln, up from $34 bln three years
* Mexican peso also makes it into top 10, NZD slips out
* Sterling, Swiss franc see dips in market share
By Anirban Nag
LONDON, Sept 5 Trading of the Chinese yuan in
global foreign exchange markets has more than tripled from three
years ago due to the expansion of offshore trade, making it the
ninth most-actively traded currency, according to a survey by
The survey by the Bank for International Settlements showed
the share of the yuan, which is only partially
convertible, has doubled over the past three years to 2.2
percent of global turnover.
The Australian dollar and the New Zealand dollar also saw
their shares of global forex trade increase, as Asian central
banks in particular sought to reduce their exposure to the
dollar and the euro, according to the BIS Triennial Central Bank
Survey of trends in the foreign exchange market.
Sterling and the Swiss franc saw slight decreases in their
market shares although they remained among the top 10 most
actively traded currencies and were joined in the group by the
Daily turnover in the Chinese yuan, also known as
the renminbi, has soared to $120 billion from $34 billion three
years ago when it was ranked the 17th most actively traded.
"The role of the renminbi in global FX trading surged, in
line with increased efforts to internationalise the Chinese
currency," the BIS said in the survey, the most authoritative on
the foreign exchange market and released every three years.
In recent years, China, while keeping a tight rein on its
capital account, has stepped up efforts to promote wider use of
its currency by introducing and expanding a slew of measures
that allow two-way fund flows in the yuan.
Earlier this year, HSBC, Europe's largest bank and
which conducts a big part of its business in Asia, said it
expects 30 percent of China's total trade flow to be settled in
yuan within the next three years. That would make it one of the
top three currencies used in global trade.
For now though, the yuan was just behind the Mexican peso
which was eighth in the global ranking.
Turnover in the Mexican peso reached $135 billion in April
2013, raising the peso's share of global FX trading to 2.5
percent. The Mexican peso has also joined the world's 10 most
actively traded currencies, moving ahead of well established
currencies such as the New Zealand dollar and the
Part of the reason for the Mexican peso's popularity is
because speculators and fleet-footed investors like hedge funds
are attracted by high interest rates, exposure to U.S. economic
growth and a drop in domestic drug-related crime.
AUSSIE'S SHARE RISES
The Australian dollar was the fifth most-actively
traded currency, with its share rising to 8.6 percent from 7.6
percent while the New Zealand dollar's share inched up to 2
percent from 1.6 percent three years ago.
Both those currencies have been in demand in the past three
years from Asian central banks who have been keen to diversify
their foreign exchange reserves into currencies other than the
dollar and the euro.
"By contrast, sterling, the Canadian dollar, the Swedish
krona and, most notably, the Swiss franc lost ground in global
FX trading in relative terms," the BIS said.
While sterling remained the fourth most-actively
traded currency, its share of the daily global turnover dipped
to 11.8 percent from 12.9 percent three years ago. The Swiss
franc's share also fell to 5.2 percent from 6.3 percent.
Amongst the commodity-linked currencies, the Canadian
dollar's share fell to 4.6 percent from 5.3 percent,
three years ago. It was the seventh most-active currency,
according to the BIS survey.
(Reporting by Anirban Nag; Editing by Susan Fenton)