The Chinese yuan overtook the US dollar as the second most active currency in transactions between Japan and China, including Hong Kong, SWIFT – the global financial messaging services provider – revealed in its latest RMB tracker.
The yuan, or the renminbi, as it’s also known, currently accounts for 7 percent of all payments between the two countries and Hong Kong, increasing its share more than twofold over the last two years, from 3 percent in 2013.
Fifth Most Active Currency Globally
The top spot remains occupied by the yen, and following the renminbi are the Hong Kong dollar and the greenback.
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Globally, according to October data, the yuan was the fifth most popular currency for payments globally in terms of value, accounting for 1.92 percent of the total, SWIFT also said.
Commenting on the report, SWIFT’s Head of Japan, Yuji Takei, said: “As China is one of Japan’s biggest trading partners, we have been monitoring the use of the Chinese currency in Japan for a while. In June 2015, a Japanese bank issued Japan’s first yuan bond and other Japanese companies are expected to follow that lead. This shows increased confidence in the RMB, which could lead to further expansion of trade and investment between China and Japan using the RMB.”
The Chinese currency was included just last week in the International Monetary Fund’s basket of currencies called the Special Drawing Right (SDR), bringing it one step closer to international currency status.