January 23, 2014 / 5:20 AM / in 4 years

China's yuan climbs to world's 8th most-used payment currency - SWIFT

HONG KONG, Jan 23 (Reuters) - China’s yuan has become one of the world’s 10 most-used currencies for payments, overtaking the Singapore dollar and Hong Kong dollar, global transaction services organisation SWIFT said on Thursday.

In December, the Chinese currency was ranked 8th for payments, according to SWIFT.

It said that over the past three years, the yuan had overtaken 22 currencies, and in December had a market share of 1.12 percent, behind the Swiss franc, with 1.29 percent.

Yuan payments increased 15 percent in December from November, while those for other currencies rose 7 percent, according to SWIFT.

In October, the yuan overtook the euro to become the second-most used currency in trade finance.

Among significant Asian currencies, only the yuan and the Korean won strengthened during 2013. The “redback” rose 2.8 percent against the U.S. dollar for the year, hitting record highs.

Traders expect the yuan will appreciate by around 3 percent again in 2014, though China’s central bank has kept it on a tight leash so far this year.

Beijing is stepping up efforts to make its currency an international one by accelerating reforms in domestic markets as well as introducing pilot programmes to allow freer yuan movements cross borders.

Yuan trade settlement has expanded quickly since it first began in 2009. The percentage of China’s trade settled in yuan rose to about 20 percent in November from 12 percent in 2012, according to the People’s Bank of China.

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