Chinese yuan remains 5th most active currency for global payments in July; Russia becomes 3rd-largest market for yuan payment: SWIFT

 

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China’s yuan has retained its position as the fifth most active currency for global payments by value in July, signaling a stable internationalization pace; meanwhile, Russia has jumped to become the third-largest market using the yuan for global payments, a report from the global financial messaging firm Society for Worldwide Interbank Financial Telecommunication (SWIFT) showed on Friday.

Yuan’s share stood at 2.2% in July, up from the 1.86% in June and was behind the US dollar, the euro, the British pound and Japanese yen. Among them, the US dollar and yuan were the two currencies that saw expansion of use. 

The share of US dollar expanded to 41.19% in July from the 38.77% in June, retaining its position as the most used global payment currency. Euro’s share edged down to 35.49% in July from the 36.46% in June, and the pound dropped to 6.45% from the 7% a month ago. While the share of Japanese yen dipped to 2.82% from 3.46%.

Russia has jumped to third place in a list of countries outside mainland China using the yuan for global payments, according to latest figures released by global financial messaging firm SWIFT on Thursday.

Russia had not even been on the monthly list before its attack on Ukraine in February, but the latest figures showed that only Hong Kong and financial powerhouse Britain are now ahead of it.

Russian firms and banks were involved in almost 4% of international yuan payments by value in July, up from 1.42% the previous month and from zero in February, according to SWIFT. Hong Kong unsurprisingly remains the top source of yuan transactions outside mainland China with 73.8% of the total, followed by Britain which accounted for 6.4%.

Observers attributed the jumping share to a stable trade between China and Russia amid US-led Western sanctions. In July, the trade volume between China and Russia came in at $16.79 billion. Among them, China’s exports to Russia amounted to $6.77 billion, while China’s imports from Russia amounted to $10.02 billion, both expanding from June.

In the first seven months of 2022, China’s trade with Russia rose 29% year-on-year to $97.71 billion, accelerating 1.8 percentage points from first half of the year.