January 8, 2013 / 11:06 AM / 5 years ago

Yuan-based global payments surge in November -SWIFT

HONG KONG, Jan 8 (Reuters) - International payments in China’s yuan surged 24 percent in November from the month before and reached a record 0.56 percent of the global total, global transaction services organisation SWIFT said, as China moves to internationalise its currency.

The increased use of the yuan, compared with an average decrease of 7 percent in worldwide use of all currencies during the period, nudged the yuan up two positions to the world’s 14th most widely used currency, SWIFT said in a report on Tuesday.

Beijing has been promoting the wider use of its currency globally through bilateral currency swaps and trade settlement deals, aiming for the “redback” eventually to match China’s overall status as the world’s second-largest economy.

Widespread use remains severely curbed by strict capital controls, although analysts say China is planning to make the yuan, also known as the renminbi (RMB), basically convertible as early as 2015.

Yuan inflows to China increased as a proportion of total transactions, partly due to easing expectations of yuan appreciation. The currency actually fell against the dollar in the first half of last year.

“While initially mainly driven by RMB outflows, the RMB inflows are now nearly as important,” the SWIFT report said.

Inflows to China accounted for 47 percent of yuan-based global payments last November, compared with only 23 percent a year earlier, SWIFT said.

Countries with close trade ties to China have been at the forefront of adopting the yuan for global transactions, since it reduces both costs and currency risks for corporations.

Australia, which sells a major portion of its natural resources to China, shot up to number four in yuan payments in November, compared with ninth place a year earlier, SWIFT said. (Reporting by Michelle Chen; Editing by Edmund Klamann)

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