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Chinese yuan joins list of most-traded currencies
Publication Date : 07-09-2013
Survey shows China's currency ranks No. 9
The renminbi, also known as the yuan, has made its debut on the list of the 10 most actively traded currencies, according to a survey released by the Bank for International Settlements on Thursday.
Daily renminbi turnover soared from the equivalent of US$34 billion in 2010 to $120 billion in early 2013, making it the ninth most-traded currency.
The renminbi registered a share of 2.2 per cent of global foreign-exchange trading volume, mostly driven by a significant expansion of offshore transactions, the BIS said.
The survey took place in April, with central banks and other authorities in 53 jurisdictions participating. These bodies collected data from about 1,300 banks and other dealers and reported national aggregates to the BIS, which calculated global totals.
"The leap of renminbi trading worldwide is natural, as the Chinese economy is maintaining stable growth and the authorities are promoting opening up and market-oriented reform," said Zhao Xijun, deputy dean of the School of Finance at Renmin University of China in Beijing.
He said thriving offshore yuan-denominated payments and transactions played a very big role in spurring the currency's global use. Zhao added that deepening reforms and changes in the domestic market were fundamental in affecting the acceptance of the currency.
Standard Chartered Bank said in August that the new Shanghai free trade zone approved by the State Council will be positive for all offshore centres.
"The plan is likely to include experimentation with freer cross-border commodity and capital flows, as well as greater yuan convertibility by businesses operating in the zone," it said.
The United States dollar remained the dominant currency, as it was on one side of 87 per cent of all trades in April, up 2 percentage points over the three-year period, according to the BIS survey.
The euro was the second most-traded currency, but its share fell to 33 per cent from 39 per cent in April 2010.
Among the major currencies, trading in the yen jumped the most, rising by 63 percent since the 2010 survey.
The 2013 survey showed a significant rise in the global importance of several major emerging market currencies.
Turnover in the Mexican peso reached $135 billion in 2013, raising the peso's share in global foreign-exchange trading to 2.5 per cent. That rise brought it into the ranks of the top 10, ahead of well-established currencies such as the New Zealand dollar and Swedish krona.
The Russian rouble also saw a significant increase in market share, making it the 12th most-traded currency worldwide, according to the BIS results.
The survey showed a significant rise in global daily foreign-exchange market activity to $5.3 trillion in 2013, from $4 trillion in 2010.