The use of yuan in cross-border transactions in China has reached record levels this year. He writes about this Financial Times According to data from the State Administration of Foreign Exchange of the People’s Republic of China (SAFE).
SAFE said 53% of China’s incoming and outgoing transactions in July were denominated in yuan, up 13 percentage points from the same period in 2021. This data mainly reflects trade agreements but also includes investment flows and debt payments.
The rise in the use of the Chinese currency in international payments received additional impetus after the start of a special military operation in Ukraine, followed by the imposition of US sanctions that limited Russia’s ability to conduct transactions in dollars. In February 2023, the head of the Central Bank of Russia, Elvira Nabiullina, announced a “sharp increase” in the use of the yuan for payments, financial transactions and deposits.
Despite the yuan’s growing use in international payments, it is still significantly lower than the US dollar on a global scale. According to international payment system Swift, the yuan accounts for only 4.74% of global payments, behind the dollar, euro and pound sterling.
Last week, the People’s Bank of China started The gradual weakening of support for the yuan signals a reluctance to let the currency become too strong. The gap between the official exchange rate and market forecasts has reached its lowest level in a year, partly because a stronger yuan could hinder the economic recovery and reduce the attractiveness of Chinese assets.
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Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.