HONG KONG Jan 23 Yuan transactions in the
United States slid 38 percent in December from November, making
2012 a flat year for growth of the Chinese currency in the
world's largest economy, global transaction services
organisation SWIFT said on Wednesday.
"We expect that most U.S. flows we currently see in RMB are
non-trade related and are subject to more variability than
countries with strong underlying trade flows like Europe, so
this is not unexpected," Lisa O'Connor, RMB director for the
organisation, said in its latest report.
As a currency for payments, the yuan, also known as the
renminbi, needs to overcome a number of challenges including
inertia and systems set up to invoice only in U.S. dollars, she
Beijing has been stepping up its efforts to promote wider
use of its currency globally through bilateral currency swaps
and trade settlement deals, aiming for the yuan to match China's
rising clout as the world's second-largest economy.
But analysts say it may prove difficult for the United
States to widely adopt the "redback", since broader use of the
yuan as well as the enhanced economic status of China will pose
a threat to the world's No.1 economy and its currency.
"I don't think the U.S. has the incentive to help promote
the internationalisation of the yuan, since they worry China
will become a threat if the yuan can be used more widely," said
Chi Lo, BNP Paribas' senior strategist in Greater China.
As for U.S. corporates, some may also be reluctant to use
the yuan if they do not expect rapid development and adoption of
the Chinese currency by other companies and countries in the
The United States represented 4.1 percent of yuan payments
by value in December, compared with 6.6 percent in November
(excluding China and Hong Kong), SWIFT data showed.
While dollar payments still dominated transactions between
the United States and China/Hong Kong, comprising 95.5 percent
of transaction in December, followed by the Hong Kong dollar at
2.7 percent, Malaysian ringgit 0.9 percent, Japanese yen 0.4
percent and Chinese yuan at 0.3 percent.
In December, overall yuan payments fell 4.2 percent from
November, compared with an average 5.7 percent decline across
However, the yuan remains the world's 14th most widely used
currency with a market share of 0.57 percent, SWIFT said.
China will steadily push forward market-based liberalisation
of interest rate and improve the yuan exchange rate formation
mechanism, while expanding the international use of the yuan to
gradually realise capital account convertibility of the
currency, Premier Wen Jiabao said on Monday.